STRATEGIES IN CORPORATE

COMMUNICATIONS:

A CASE STUDY OF KENYA COMMERCIAL

BANK

ByWAHOME ROBERT GIKONYO

K/50/P/8892/01

UNIVERSITY OF NAIROBI EAST AFRICANA COLLECTION

yA research Project Paper Submitted to the School of Journalism in Partial

Fulfilment of the Requirements for the Master of Arts Degree in

Communications Studies

SEPTEMBER, 2005

University of NAIROBI Library

0442650 8

DECLARATION

“ I, the undersigned declare that this project is my original work and it has not been

presented to any other university for academic credit.”

Wahome Robert Gikonyo

UNIVERSITY OF NAIROBI EAST AFRICANA COLLECTION

“This project has been submitted with my approval as university supervisor”

OJ"

11

DEDICATION

I would wish to dedicate this work to my mother, Emma Wambui, who taught me

virtues of patience and hard work, which have been my guiding principles while

working on this study.

ACKNOWLEDGEMENTS

Accomplishing a task of this magnitude calls for concerted efforts. It is in this regard that I

take this opportunity, to thank all the lecturers and staff of the School of Journalism for

making me competent enough, to carry out and complete this study. Thank you very much.

My special gratitude goes to Mr. Peter Onare for his advice and guidance during the whole

process of the study. I am particularly grateful for the commitment he demonstrated that even

when his professional and social duties tended to overwhelm, he still kept his promise to me.

May God bless him abundantly.

My other thanks go to Petros Ndung’u, for facilitating access to some research literature

without which, this study would not have been realized. Other notable people who must be

acknowledged include Rachael Njoroge of ACCE library for availing research literature

whenever called upon. Nancy Munge and Jimmie Waweru both of CODEC are equally

acknowledged for the enormous support given in typing-setting, editing and designing this

work. I am indeed grateful.

There are innumerable others who contributed to this work though they remain nameless, this

does not in anyway make their contribution less significant. I thank them all.

VThe Corporate Affairs and Human Resources Divisions of Kenya Commercial Bank deserve

thanks for availing information and research materials, besides allowing the study to be

carried out there without, which this study would not have been realised.

Last but not least, I would like to thank my special friend, Lucy, for giving me

encouragement at times when I felt demotivated to continue. Once again thank you.

IV

ABSTRACT

The study sought to elicit empirical evidence on the role of Corporate Communications

Strategies as used by Kenya Commercial Bank (KCB), during its transformation. With this

evidence the study wished to show that Corporate Communications Strategies have strong

impact, in transforming organizations, which have erstwhile been performing below

shareholders expectations.

Three groups of respondents were interviewed. These were the ordinary staff members,

customers and human resources management staff. They were drawn from ten branches of

Kenya Commercial Bank in Nairobi

The study confirmed that KCB used multifaceted Corporate Communications Strategies,

which contributed to its turnaround as confirmed by the respondents in the study In doing

this, the bank started by transforming both its visual and corporate images through a blitz of

advertisement campaigns. Positioning of KCB staff to the media and development of internal

goodwill through staff training followed. These were later enhanced by development of

corporate social responsibility policy and sponsorship of activities and events.

Refurbishments of its branches across the country, product realignment and customer

motivation concluded the transformation.

Among the major findings of the study were enhanced customer satisfaction, which was

realised through the bank’s new products and services. Other fundamental findings were that

the bank’s customer base had increased by eight percent, resulting to profitability, which

gave the bank its strongest balance sheet in ten years. Consequent upon the transformation, its

shares increased in value at Nairobi Stock Exchange, while its Rights Issue were snapped and

oversubscribed.

Some of the study’s recommendations include the need for organizations to recognize and

make use of multifaceted Corporate Communications Strategies whenever they are

embarking on transformation or in times of crisis. These strategies should target both internal

and external publics of the organization, as this will ensure an all inclusive corporate

communication process, which will motivate all to support the process, thus guaranteeing

positive results.

v

Other notable findings from the study were that Corporate Communications Strategies were

enhanced by other factors in transforming the bank. Some of the factors cited included lack of

political interference, reorganization and hinng of competent management staff from leading

corporate organizations. Others were well-educated and skilled staff supported by a strong

countrywide branch network of the bank, among others.

UNIVERSITY OF NAIROBI EAST AFRICANA COLLECTION

'Y

vi

TABLE OF CONTENTS

PAGES

Declaration---------------------------------------------------------------------------------------------------- ii

Dedication---------------------------------------------------------------------------------------------------- iii

Acknowledgement------------------------------------------------------------------------------------------iv

Abstract-------------------------------------------------------------------------------------------------------- v

Chapter One

1.0 INTRODUCTION

1.1 The role of corporate communications in an organization-------------------------- 1

1.2 The corporate role------------------------------------------------------------------------- 2

1.3 Kenya commercial bank-A historical perspective------------------------------------ 6

1.4 Statement of the problem-----------------------------------------------------------------9

1.5 Hypotheses of the Study------------------------------------------------------------------ 1 3

1.6 Objective of the study---------------------------------------------------------------------- 1 4

1.7 Research Questions-------------------------------------------------------------------------1 4V

1.8 Theoretical assumptions----------------------------------------------------------------- 1 4

1.9 Rationale of the study---------------------------------------------------------------------- 1 4

1.10 Limitations of the study-------------------------------------------------------------------1 5

1.11 Definition of terms-------------------------------------------------------------------------1 5

Chapter Two

2.0 LITERATURE REVIEW

2.1 Corporate Communications--------------------------------------------------------------1 6

vu

2.2 Research and Corporate Communications--------------------------------------------1 6

2.3 Planning corporate communications program--------------------------------------- 1 8

2.4 Ways of appreciating the situation----------------------------------------------------- 1 9

2.5 The role of communications-------------------------------------------------------------1 9

2.6 Objectives of corporate communications program----------------------------------- 2 0

2.7 Strategies in corporate communications------------------------------------------------ 2 3

2.7.1 Communications to internal publics------------------------------------------------2 4

2.7.2 Tools used in internal communications--------------------------------------------2 7

2.7.3 Communications to external publics----------------------------------------------- 2 8

2.8 KCB’s Corporate Communications Strategies during transformation---------- 3 3

2.9 Theoretical framework-------------------------------------------------------------------3 7

2.9.1 Learning theory---------------------------------------------------------------------- 3 8

2.9.2 System theory------------------------------------------------------------------------ 3 8

Chapter Three

3.0 RESEARCH METHODOLOGY

3.1 Research design--------------------------------------------------------------------------- 4 0V

3.2 Site selection------------------------------------------------------------------------------4 0

3.3 Sample population----------------------------------------------------------------------40

3.4 Sampling procedures------------------------------------------------------------------- 4 1

3.5 Data collection--------------------------------------------------------------------------- 41

Chapter Four

4.0 RESEARCH FINDINGS

4.1 Data analysis of staff responses---------------------------------------------------------4 3

4.2 Data analysis of customer responses--------------------------------------------------4 9

viii

5.0 Chapter Five

5.1 Discussions of the findings------------------------------------------------------------ 5 9

5.2 Recommendations--------------------------------------------------------------------- 6 3

5.3 Conclusion------------------------------------------------------------------------------ 64

5.4 References/Bibliography-------------------------------------------------------------- 6 5

5.4 Appendices------------------------------------------------------------------------------66

5.6 Research questionnaires-------------------------------------------------------------6 7

IX

CHAPTER ONE

INTRODUCTION

1.1 The role of corporate communications in an organization

Corporate Communications, which is an aspect of Public Relations, is a term that

encompasses all forms of communications that an organization uses to win the goodwill,

support, confidence and trust of its publics. This is a vital function of organization

management.

Integral to Corporate Communications, is the influencing of public opinion. This is crucial if

an organization is to gain a favorable corporate image, especially if its image has been tamted

by a senes of loss making scandals, mismanagement and unprofessional business practices.

For such an organization to revert back to a growth trajectory, it must employ a mynad of

corporate transformation strategies, all anchored by corporate communications accompanied

by bottom line objectives.

Corporate Communications practitioners once operated at the lowest management levels in

many organizations. However, this trend has drastically changed in recent years. Today, it is

a wise company that puts the corporate communications professional right in the inner circle

of its management (Seitel, 1987)''V

In most organizations, the position of corporate communications practitioner has been given a

more prominent role in that the corporate communications director or manager reports

directly to the top management. In this regard, the corporate communications practitioner

needs to be privy to what the management is thinking on virtually every public issue at any

moment.

The flip side of this is that the practitioner should also be in a position to keep a careful watch

on what the public is thinking and anticipate their attitudes towards the organization, its

S e ite l P. F. (1987). The Practice o f Public Relations, Third Edition, Merrill Publishing Company, N Y . Seitel

was a senior Vice-president, Director of Pubic Affairs, The Chase Manhattan Bank, New York.

1

products and services. Consequent upon this, he will be in a position to gauge what the pubic

decisions are likely to be and then strategize on how to act on them. The practitioner should

also be in a position to relay the findings to the management

.(torporate Communications’ decisions affect the credibility and indeed the viability of every

organization, either for the better or for the worse Organizations are relying more and more

on corporate communications practitioners to help them win public support, trust, goodwill

and confidence. Without the critical support of its publics, an organization’s very existence is

J —med.

Corporate Communications department in any organization should act as the corporate

antenna that quivers to every shift in the social, economic, technological and political breeze.

When such shifts occur, the department should advice the management on the next course of

action and by so doing have an impact on decision-making. By involving the corporate

communications department in crucial decision-making, organizations have averted potential

crisis. However, this presupposes that the department has control over its domain, more so in

times of crisis.

In corporate work, the task of corporate communications personnel is to interpret the goals,

methods, products and services of commerce and industry to the public and simultaneously to

help their employers operate in a socially responsible manner. Such practitioners indeed

function as bridges. On one side is management, whose legitimate profit motivated goals

suffer at times from their own insensitivity to the public’s wishes and perceptions. On the

other side, part of the public misunderstands the role of business in a free, competitive society

and looks at corporations - especially the large ones - suspiciously (Wilcox et al, 1992).

1.2 The corporate role

The diagram below presents in a schematic form the different concerns that big corporations

have to contend with as illustrated by one corporation, General Electric of United States of

America (USA). It categorizes the various corporate concerns it must take in consideration at

every step of executive decision-making.

2

The diagram below illustrates the above-mentioned concerns.

Adapted from Wilcox et al 1992, Public Relations Strategies And Tactics, Harper Collins Publishers Inc

Broadly speaking, an organization has two publics, the internal publics who are the

employees and the external publics who include the organization’s stockholders, security

analysts, investors, clients, and suppliers, among others. The corporate Communications

department in an organization must device strategies of communicating to each of these

diverse publics also called concerns as above, if the organization is to effectively meet its

goals.

What this means is that the department must undertake research from time to time so as to

gather facts and statistics on an organization’s products, services, programs and also the ever

changing needs of its publics. This is especially crucial for an organization, which is

undergoing lean times and is in dire need of a turnaround so as to remain afloat. Armed with

this information, the organization is then able to identify and define its publics and its

information needs.3

This information then determines the design of the messages, the programs, the medium to be

used, and the schedule to be adopted in using the medium and finally the ultimate

implementation strategies of the program. This seems to have been the case with Kenya

Commercial Back (KCB) from January 2003 to December 2004. The bank put into place a

series of communications programs, which together with other corporate transformation

programs were able to turn around its hitherto dented image, and within a short time it was

able to bounce back to profitability.

Going by the comments and views of corporate analysts and commentators from the leading

local dailies: The Daily Nation and The Standard among others, the bank earned the

goodwill, confidence, support and trust of a considerable number of its publics, once more.

According to them, the bank is now a showcase of how corporate transformation can be a

success story if supported by effective corporate communication strategies.

In amplifying the above, Abwao Oluoch, a business writer for Pan African News Agency

(PANA), in an article, in PR Arena, Journal of the Public Relations Society of Kenya June

2003, commented:

“Riding the crest o f modest publicity and profits it recorded at the end of the last financial year, was the Kenya Commercial Bank (KCB). The bank’s rebranding decision to improve its corporate image was a welcome move into corporate world with a resultant rise in its share prices throughout the last six months o f this year.”

The other upshot of undertaking research in corporate affairs is that an organisation is able to

come me up with new products and services tailored to meet the identified needs of its clients

and potential clients. During its turn around, KCB introduced a variety of products based on

research like, Simba Savings Account for serious savers, Gold Plus Account and KCB

Personal Loan for quick and convenient access to cash. Others include, KCB Personal Loan

for Teachers Service Commission (TSC) (Teachers and Staff), KCB Bank Account and KCB

European Investment Bank Kenya Global Private Enterprise Project, among others. This is

what has been referred to as Marketing Public Relations. Personnel who work in this area

usually serve in or are closely affiliated with the marketing department.

4

Wilcox et al, 1992, observed a similar development in General Motors, (USA) in 1990, where

the public relations department was tied to marketing by creating a new department of “

communications and marketing.”

Marketing public relations is variously defined. Wilcox et al, 1992, have quoted Thomas 1.

Hams, a former vice chairman of Golin/Harris communication in New York, in his book, A

Marketer’s Guide to Public Relations as having defined marketing public relations as:

“ The process of planning, executing and evaluating programs that encourage purchase and consumer satisfaction through credible communication of information and impressions that identify companies and their products with the needs, wants, concerns, and interests of consumers.”

In the same vein, an organization can do away with some products and services if they are

deemed to be obsolete. These are products and services, which do not fit the vision for the

future of the company. However, the corporate management cannot just wake up one day and

declare some of its goods and services obsolete, corporate communications to all concerned is

an important first step.

Firstly, it should communicate to its internal publics and then to the external publics. This is

what KCB did by organizing an event dubbed “getting better and better,” event, in which its

staff was trained in preparation for the rebranding of the bank. Jack Welch organized a

similar event when he began the transformation of General Electric in 1981. Robert H. Miles

in his book Corporate Comeback, the story o f renewal and transformation at national

semiconductor (1997) writes: '

“Long-term General Electric employees did not like seeing large, traditional parts of the company closed or sold off. But the new resources they received provided some assurance that the business remaining in General Electric’s portfolio would be better positioned to achieve the stretch goals that were part o f the transformation initiative.”

Corporate sponsorships of special events like sports, philanthropic activities, road shows, a

television program funded by an organization, institutional facilities and staff brochures and

grand opening ceremonies are also done on basis of research Organizations make use of

these events and publications to promote their corporate image, products and services. For

example, during its transformation, KCB became more visible in the activities mentioned

5

above. KCB Cascade, the staff newsletter of the Kenya Commercial Bank, June 2003 edition

carried several news items on the bank’s sponsorship of sports events, for instance, horse

racing, as exemplified in the following quotation.

“Colour and splendor were the hallmark of this year’s KCB Race Day at Ngong Racecourse that also witnessed the rendition of the new KCB colours all through the venue. Over 3000 race enthusiasts showed up to have fun and gamble the afternoon away. ”

Also, on basis of research, company wide graphics program that changes the corporate

colors, identity and the image of an organization are also initiated and communicated to the

public, more so if the organization wants to shed unpleasant and old corporate image. KCB,

for instance, changed its corporate colors from red, white and black to green and blue.

KCB sponsors, Business Weekly, on Kenya Television Network (KTN), a program that

features the main highlights of the local business sector in a week. Towards the end of the

program, the main highlights of KCB’s transformation in course of the week are featured, for

instance, new products and services, grand openings of its new and refurbished branches and

new managerial appointments, among otherc. " R tC A N A ^ O L ^ C ^

In a sense, multifaceted Corporate Communications are indispensable for an organization that

wants to remain viable and relevant in modem day’s business world KCB exemplified this

fact!

1.3 Kenya Commercial Bank - A historical perspective

'VThe history of Kenya Commercial Bank (KCB) dates bank to 1896 when its predecessor the

National Bank of India, opened a branch in Mombasa. The National Bank of India merged

with Grindlays Bank in 1958 to form the National and Grindlays Bank.2 In 1970, the Kenya

Government acquired a 60% shareholding in the National and Grindlays Bank and the bank’s

name changed to Kenya Commercial Bank. This was a milestone in the banking industry in

Kenya, as KCB became the biggest indigenous bank in the country.

Later on, KCB established two subsidiary companies, the Kenya Commercial Finance

KCB since inception, Historical background, a publication of economics and planning division of KCB Ltd., 1992.

6

Company Limited (KCFC) and Savings and Loan (Kenya) Limited (S&L). These two were

established in 1971 and 1972 respectively. The two subsidiaries were established for the

purpose of meeting the growing demand for more specialized financial services, for instance,

KCFC specializes in the administration of financial schemes and services, which include

long-term lending. On the other hand, Savings and Loan (S&L) specialized in the mortgage

financing, a service that it continues to offer Together, these wholly-owned subsidiaries and

other associated companies form KCB Group

The incorporation of KCB in 1970 as the first indigenous Kenyan-owned bank drastically

changed the course of the bank’s development. Prior to Kenya’s independence in 1963, the

bank’s policies mainly looked at foreign interests, mainly the interests of then colonialists,

but it was now able to play a leading role in the promotion of Kenya’s economic growth and

development.

KCB has the largest number of banking outlets across the country. In 1970, the bank had 32

full-time branches, of which 25 were located in rural areas, five in Nairobi and two in

Mombasa. By December 2004, the bank boasted of 113 outlets across the country.

In 1976, the Government acquired 100% of the shares to take full control of the largest

commercial bank in Kenya. As the main shareholder, the Kenyan government facilitated the

rapid expansion of the bank across the country. KCB is the only major bank in the country

with branches even in the remotest parts of the country.V

In the early years of its operations deposits increased astronomically, for example, in 1970

deposits stood at KShs 864 million and by the end of 1992, the deposit level had reached

KShs 21, 321 billions. In 1970, the bank’s advances stood at KShs 819.6 million and by 1992

they had reached KShs 5,602 billion. The bank’s profits in 1970 stood at KShs 13.8 million

and by 1992 they had reached Ksh25, 867 billion.3

With time, the Government saw the need to divest itself from banking business and become a

KCB Rights Issue, June 2004. Information Memorandum7

regulator. In this regard, it gradually reduced its shares from 100% to 35% and in 2004 it

offloaded a further 10%. This reduced its shareholding to its current 25%.

Today, KCB offers a wide range of banking services to its customers. These include banking

services, for instance, savings accounts, current accounts and money transfers. It also

advances loans for small and medium enterprises, among others

In an increasingly globalized economy, KCB has continued to strengthen the interdependence

between domestic and external economies. On this front, it has continued to expand working

arrangements with banks in other countries. Today, it has 400 correspondent banks

throughout the world. This notwithstanding, a subsidiary, Kenya Commercial Bank

(Tanzania) Limited was incorporated in Dar-es-salaam in 1997 to enhance its customer base.

The phenomenal growth recorded by the bank in the period above took a downturn from

1993 to the year 2002 mainly due to what financial relations analysts attribute to

mismanagement and interference by individuals with political clout in the then government.

The bank was coerced to advance huge and unsecured loans to these individuals most of

which it is still struggling to recover. This is an issue that continues to haunt the bank. In the

year 2002, the bank returned a shocking KShs 3 billions loss. This was after what the bank

referred to as “realistic provisioning of its expansive bad debt book”.

In the Goldenberg Scandal Inquiry, (2003-2004) which probed how billions of public funds

were lost through dubious export compensation to Goldenberg International and associated

companies in the early 1990s, KCB was adversely mentioned as one of the conduits through

which the funds were siphoned. For example, the Daily Nation, (March 23, 2004 P. 19)

quoted:“Mr. Justice Samuel Bosire, The Goldenberg Inquiry’s chairman has directed that a former Kenya Commercial Bank’s general manager Mr. Elijah Bii be recalled to the witness stand. He will be expected to tell more on the circumstances under which the KShs 5.8 billion was moved form the paymaster general’s account at Central Bank of Kenya to KCB before getting siphoned out to Goldenberg associated accounts.”

However, from January 2003 the bank embarked on an ambitious turnaround that saw it

record a marked profit of 150 million at the end of the first quarter of that year, its first in five

years! In February 2004, the bank returned a pre-tax profit of Kshs750 million for the whole

8

of 2003 and for the first time in four years the bank was able to pay dividend payout of KShs

1 per share. Financial analysts and commentators referred this as the watershed for the bank.

This trend continued. In the first quarter of 2004, KCB reported an 89 per cent growth in

profits, which translated to KSh284 million compared to Shi50 million during the same

period the previous year In the half year to June 30, 2004 the bank reported a pre-tax profit

of Kshs.649 million. In the light of this development, KCB Cascade, September 2004 edition

quoted the chief executive as saying:

“The 2004 first half results are very encouraging and show a significant jump over the period in 2003. This is a performance we believe we can sustain into the future and a major boost to the bank.”

The bank has continued to perform superbly well in all fronts. As we mentioned earlier, KCB

is a bank that is close to the hearts of many Kenyans, first because it is the biggest indigenous

bank, secondly it has outlets in almost all parts of the country and it has a huge deposit base

mostly from small and medium savers. Its efforts to turnaround have therefore been hailed by

financial analysts, economic commentators, its clients and staff, and therefore worth

studying.

1.4 Statement of the problem

As cited earlier on, KCB is the biggest indigenous bank in Kenya, it is also the bank with the

largest network of branches across the country and it also has huge deposits of many

Kenyans. For many years, prior to 1993, the bank performed reasonably well mid it spread its

tentacles in the breadth and width of the country. It also registered a huge growth in deposits

and advances over the same period. However, the bank’s fortunes plummeted in mid 1990s,

which culminated in a shocking loss of KShs 3 billion in 2002.

To stem any further losses and lack of public confidence in the bank, KCB embarked on

ambitious corporate transformation programs in 2003, which were hinged on corporate

communications aimed at turning round the organization. These corporate communications

programs targeted both internal and external publics.

The role of corporate communications in modem day’s business and industry cannot be

9

overemphasized. This is more so for an organization that is undergoing transformation or a

cnsis. KCB used corporate communications that may be compared with what Johnson and

Johnson did in 1980s, when it found itself in a public relations crisis in Amenca. This was in

connection with Tylenol poisoning crisis.

One of the company’s products, Tylenol, a paracentamol, had been contaminated and a

number of consumers poisoned Without any defensive posturing, the company swiftly put in

place a communication program designed to control the crisis and avert more danger to the

consumers. Its agents were directed to pull the capsules off the shelves and all the

advertisement and promotion of the product was brought to an immediate halt.

After this had been done, the next step was to get the remaining capsules out of the hands of

consumers by mounting a national advertising campaign. The result was that the public and

news media reactions were predictably positive and supportive One year after the

poisonings, the Los Angeles Times wrote of the crisis:

“----- will be studied in textbooks on marketing, advertising and public relations. “ Cutlip et al.

(1985).5

KCB corporate communications intervention was double-pronged; it addressed its internal

and external publics. On the internal publics, the bank first trained its 2,800 staff in what it

referred to as “getting better and better,” event. This was aimed at first winning the goodwill

of its staff, which was an important first step if the transformation was to be successful. The

editor of KCB staff magazine KCB Cascade6, was happy to note in the June 2003 issue that:

“— Most members o f KCB team are very much in synchrony with the objectives of the rebranding of KCB and are taking steps to deliver our Brand Promise ‘making the difference’. This is important because for our new brand to succeed and gain requisite recognition, the people in the organization must live the values that the renewed organization stands for.”

Scott M. Cultlip (1985). Effective Public Relations, Cutlip is Dean Emeritus, Henry W. Grady College o f Journalism and Mass Communication, The University o f Georgia

Cascade, is the staff newsmagazine of KCB, June, 2003 edition.10

This corroborates what Edward Pendray, a former editor of, Public Relations Journal, in

America, observed when he opined - that an organization must change itself if it wants to

influence the public opinion favorably. According to him, this is easier than changing the

public. Dr. Pendray, as quoted by Seitel, 1987 goes on to say:

“The public will never change its thinking about you unless you, on your own, reform any questionable policies and practices,”

In January 2003, to address its external publics, KCB went the Johnson and Johnson way as

quoted earlier. The bank first communicated that it had made a big loss of KShs 3 billion and

then assured its stakeholders that it had taken steps that would stem any further losses

These other steps included change in its management, which was aimed at inspiring more

confidence in the stakeholders. In this regard, a new Chief Executive Officer, Terry

Davidson, was appointed from Citibank’s subsidiary in Nairobi to replace Gareth George.

This prompted Tom Mogusu, in The Financial Standard, May 11, 2004, to make the

comment below:“ One year ago when he got chief executive’s job at Kenya Commercial Bank, the situation at this state owned bank did not look very good. Despite the efforts that previous CEO, Gareth George, had put in place to turn around the company, nothing seemed to be moving. The bank was steadily losingcustomer confidence and facing political trouble over the huge salary its CEO was earning........Seventeen months later, his strategy has been vindicated with KCB now enjoying financial health. Last year, the bank started making money and Davidson even convinced his board to toss in a dividend payment to reward the shareholders for their long patience during the years the bank was hemorrhaging cash.”

In line with modem day’s corporate communications, KCB’s new CEO has acquired the role

of the organization’s chief spokesperson and he is more visible, for example, by touring

various bank’s branches and businesses across the country, personal involvement in the

organization’s corporate social responsibility events and participating in the bank’s sports

events.

Having addressed the staff and CEO issues, KCB focused its attention on its corporate

image. Consequently, it acquired new corporate identity and colors. The bank corporate

colors changed from black, white and a red lion icon to green and a blue lion icon. The new

corporate colors and identity were aimed at symbolizing and communicating a new culture of

commitment to quality service and innovative products

11

Further, KCB refurbished its branches countrywide starting with those in Nairobi and to

complete the picture, new products and services were initiated for its customers and potential

customers, all in an attempt to cultivate the image of a modem and progressive bank.

In its three years strategic plan, KCB aimed at cultivating the image of a more customer-

focused bank that would dedicate more staff to deal face to face with their customers. This

was in an effort to give more personalized customer care to its clients. The bank changed its

staff ratio in a typical branch from 75 percent back office (staff doing bank work other than

attending the customer) and 25 percent front office (staff dealing with the customer directly)

to approximately 40 percent in the back office and 60 percent front office.

This enhanced face-to-face communication between the bank and its customers and thus

created a better understanding between the two. This resonates with the observation made by

Dr. Pendray, as quoted by Seitel, 1987 when he said:

“the better people know about the organization, the more they will like it providing the organization deserves it.”

In the area of its products and services, KCB recognized that the public had inadequate

knowledge that needed to be addressed. It faced this problem head-on by embarking on

corporate publicity campaign to promote its products and services during the period under

study. This was carried in both print and electronic media. These included radio, television,

brochures, posters and road shows. Automated Teller Machines (ATMs) also carried

information about these products and services, among others.

Furtherance to improving its products and services, the bank invested massively in its

technology platform, in line with what the market leaders, Barclays and Standard Bank,

among others, had done by expanding its ATM network. By June 2004, the tally of its ATMs

had increased from 56 to 71. The bank envisaged having 116 ATMs by mid 2005. (KCB

Rights Issue June 2004 - Information Memorandum).

Other activities that the bank embarked on to raise its corporate visibility and image included

sponsorship of visible events during the period under study unlike in the past. For example,

12

Safari Rally in November 2003 and in March 2004, horse racing at Ngong racecourse and

tennis tournaments, among many others.

In the area of Corporate Social Responsibility, KCB was not left behind. It was involved in

myriad activities like donations to children’s homes, paying school fees for the disadvantaged

children and environmental clean-ups m the urban areas, among others. All these activities

were aimed at improving the well being of the society in which it operates and consequently

win their goodwill.

The results were evident because by the first quarter of 2003, the bank announced a profit of

KShs 150 million and by the end of the same year it recorded KShs 750 million profit. In the

first quarter of 2004 its profits again went up by 89% compared to a similar quarter in 2003,

which translated to a profit of 284 million up from 150 million in 2003.

It recorded growth in many other areas. For example, the value of KCB stock at Nairobi

Stock Exchange did considerably well in the period under study This was exemplified by the

fact that in May 2003 the value rose to a high of KShs 102 from below KShs 20 at the

beginning of the same year.

Another area where the bank scored highly is the over-subscription of its Rights Issue that it

floated between June to August of 2004. Initially, the bank targeted to raise KShs 2.45 billiony

but it was oversubscribed by KShs 300 million.

These efforts made by KCB to turnaround and the role of Corporate Communications

Strategies deserve a scholarly inquiry, which this study seeks to undertake. It was intriguing

that KCB, as a bank organization, had within a period of four years made losses but within

one year it bounced back to profitability. This was attributed to Corporate Communications

Strategies, among other factors.

1.5 HYPOTHESES OF THE STUDY

(i) Effective and multifaceted Corporate Communications Strategies can turn around a loss

making organization.

(ii) Effective Corporate Communications can help in building confidence, goodwill, support13

and trust between an organization and its various publics.

1.6 THE MAIN OBJECTIVE OF THE STUDY

The main objective of this study is to investigate the role played by Corporate

Communications Strategies in KCB turnaround.

1.6.1 OBJECTIVES OF THE STUDY

(i) To investigate whether the Corporate Communications Strategies employed by KCB from

January 2003 to December 2004 contributed in any way in winning its publics’ goodwill,

trust and confidence.

(ii) To identify the most effective communication channels used by KCB in its corporate

communications to its publics during the period under study.

1.7 RESEARCH QUESTIONS

(i) Does KCB have Corporate Communications Strategies?

(ii) What are these Corporate Communications Strategies

(iii) How is KCB evaluating its Corporate Communications Strategies as it continues with

the transformation? What have been the results?

(iv) To what extent can KCB turnaround be as a result of its Corporate Communications

strategies?

1.8 THEORETICAL ASSUMPTIONS

The study assumes that KCB turnaround was largely as a result of the renewed Corporate

Communications Strategies.

1.9 RATIONALE OF THE STUDY

This study aims to investigate Corporate Communications Strategies employed by KCB after

years of loss making. KCB turnaround has been termed as the most phenomenal and messiest

in corporate Kenya by financial analysts, corporate commentators, scholars and public

relations enthusiasts. The study is therefore current since the bank has continued to perform

exceedingly well defying the slow recovery of the national economy. The study seeks to elicit

whether the multiple corporate transformation strategies used by KCB, which were anchored

14

by Corporate Communications, during the period under study, contributed in any way

towards this transformation.

1.10 LIMITATIONS OF THE STUDY

« Due to financial and time constraints, the study could only cover Nairobi area.

« The study population could have been larger had KCB management allowed unlimited

members of staff to join the study.

« This area of study has limited scholarly research done, particularly in this country. It was

therefore not easy to access relevant materials

1.11 DEFINITION OF TERMS

Strategy

According to Reader’s Digest Oxford dictionary (1996), a strategy is a plan of action or

policy in business or politics; it is a plan, tactic(s) design, policy, procedure, approach,

manoeuvre, scheme, blue print, scenario or master plan.

Corporate

Corporate describes a business or commercial venture or that which belongs to a corporation

or group.

■/•Communication /

According to Reader’s Digest Oxford dictionary (1996), communication is the act of

imparting, especially news. While Wilcox et al (1992), have defined communication as:

“ The act of transmitting information, ideas and attitudes from one person to another.”

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CHAPTER TWO

LITERATURE REVIEW

2.1 Corporate communications

Arthur W Page is regarded as the pioneer of modem day’s corporate communications. He

became American Telephone, and Telegraph’s (AT&T) first public relations vice-president

in 1927. He was able to help AT&T to manage its reputation as a prudent and proper

corporate citizen. Page’s five principles of successful corporate communications are as

relevant now as they were in the 1930s.

According to Page, Corporate Communications fulfils the following functions for an

organization:

i) Makes sure management thoughtfully analyzes its overall relation to the public.

li) Creates a system for informing all employees about the firm’s general policies and

practices.

iii) Creates a system that gives contact employees (those employees that deal directly with the

public) the knowledge needed to be reasonable and polite to the public.

iv) Creates a system that draws employee and public questions and criticism back up through

the organization to management.

v) Ensures frankness in telling the public about the company’s actions. (Cutlip, 1985.)V

2.2 Research and Corporate Communications

Corporate Communications function as the “corporate conscience ” and this can only be done

effectively thiough research. According to Cultip (1985), research is, “The systemic

gathering of information for the purpose of describing and understanding a situation, and

checking out assumptions about publics and public relations consequences.” This definition

also applies to corporate communications.

According to Seitel (1987), research is a highly effective tool for convincing management

that corporate communications has an important role to play in achieving corporate

16

objectives. He further observes that indeed, research can aptly demonstrate that corporate

communications improves the company’s effectiveness and contributes to the critical bottom

line of profit.

Similarly, Seitel says that due to scarce resources, management wants facts and professionals

to show that their efforts contribute not only to overall organizational effectiveness, but also

to the bottom line It is therefore important that an organization acquires enough accurate and

relevant data about its publics, products and programs.

Jefkins (1992) says that research is about problem solving. Through research, a situation is

appreciated and it is possible to recognize the problem and to recommend a solution. For

example, customers may decline to buy a product or a service because they do not believe the

claims made for it. Such situations can only be corrected if only they are discovered through

research. An organization may not be aware of the way it is perceived by its publics without

research

Research helps an organization to identify and define its constituent publics. This knowledge

is important when it comes to designing of its messages directed to the identified groups,

designing of programs and in choosing the media to use in conveying its messages. This is

important in that it helps in knowing the schedule that will be used in using the media up to

the implementation tactics of the program.

In resonating with Jefkins, Cutlip (1985) recommends that practitioners apply theory and best

available evidence in four basic steps to solving problems. These are:

i) Defining the problem

This entails the probing and monitoring of knowledge, opinions, attitudes, and behaviours of

those concerned with and affected by the acts and policies of an organization. In a sense, this

is the intelligence function of the organization and requires determining, “what’s happening now?”

ii) Planning and programming

Facts and figures collected during the research are brought to bear on the organization. This

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results in decisions affecting targeted publics, objectives, procedures and strategies in the

interest of all concerned. Objectives are also formulated at this stage.

iii) Taking action and communicating

Involves the implementation of the plans and programs through both actions and

communications designed to achieve specific objectives. At this stage, the big question is

“how do we do it and say it?”

iv) Evaluating the program

This entails the measurement of the results of the program and assessing the effectiveness of

the program.

In summary, research in corporate communications helps the practitioners to come up with

innovative solutions to organization’s problems. It also assists the practitioner in making

these solutions understandable and acceptable to their colleagues. This means that the

practitioner should think strategically. He or she must demonstrate the knowledge of the

organization’s mission, objectives and strategies.

2.3 Planning Corporate Communications Programs

Most corporate communications practitioners have realized the importance of planning before

embarking on a communications program. Seitel (1987) underscores the importance of

planning when he says:y

“...Professional public relations work emanates from clear strategies and bottom line objectives, which flow into specific tactics, each with its own discrete budget, timetable and allocation of resources.”

Jefkins (1992), on the other hand, outlines four important reasons for planning. These are to:

i. set targets for communications operations against which results can be assessed.

ii. estimate the working hours and others costs involved.

iii. select priorities which will control the number and the timing of different operations in the program.

iv. decide the feasibility of carrying out the declared objectives according to the

availability of: sufficient staff of the right calibre, physical equipment such as

materials, cameras or vehicles and adequate budget.

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2.4 Ways of appreciating the situation

A practitioner has myriad methods of studying the overall environment in which the

organization is operating, according to Jefkins (1992). Some of these include, opinions,

attitudes or image surveys. While customer complaints, product performance, press cuttings

and monitored broadcasting scripts contribute to the others. Among the others cited were

share pnce, (if a public company), stock market opinion, dividends and balance sheet.

2.5 The role of communications

According Wilcox (1992), communication is the third step in corporate communication

process after research and planning. It entails the implementation of the decisions. In

corporate communications, it takes various forms, for example, news releases, press

conferences, social events, brochures, speeches, newsletters, information memorandum,

sponsorships, road shows, Annual General Meetings (AGMs), annual financial report and

accounts, among others.

Wilcox, (1992), Seitel, (1987) and Alexis S. Tan (1985), delineated the following factors that

should be considered in the process of communication.

Feedback

Feedback is able to tell the communicator whether the message reached the intended

audience and elicited the desired effect on them This is important because while the message

might reach the correct receivers, they might perceive it differently from what the source'/intended.

The effectiveness of communications

The effectiveness of communications depends on many factors. These include such factors as

educational level, social class, regional differences, nationality, cultural background,

credibility and attractiveness of the source, among others.

KCB took cognizant of the importance of better communication between itself and its

customers. This resonated with the view expressed by Hellen Kithinji, of the bank’s Retail

Division, in KCB Cascade September 2004 edition, where she was quoted as saying:

19

“ Research has shown that if products and services are competitive and acceptable to the customer, only the small things matter. Like every human being, a customer needs to feel cared for through simple acts such a smile, a greeting, being addressed by name, a word of thank you, empathy when things go wrong and other simple things that make one feel happy and appreciated. ”

Barriers to communications

Barriers to effective communications tend to increase as one advances to large-group

meetings and ultimately to mass media. This is due to the fact that the audience is no longer

intimately connected with the sender. The immediate feedback is no longer there and the

message could also be distorted as it passes through the media gatekeepers. Other barriers to

effective communication include censorship, prejudices, timing and selectivity (Wilcox,

1992)

Communications and awareness

Wilcox further observes that one of the most important effects of communications is creation

of awareness among the target publics. It is the beginning of any behavioural process or

adoption of new ideas and products. This awareness creates interest and motivates the person

to seek more information about the idea, service or product.

2.6 Objectives of a Corporate Communications program

A practitioner comes up with objectives of a corporate communications program after wide

consultations and approval from the organization’s management, more so, the chief

executive. In defining these objectives, a practitioner should prioritize the order in which they

will be implemented. Jefkins, (1992) has outlined an assortment of possible objectives for an

organizations communications program.

These include:

i) To change the image because the company has adopted fresh activities. However, before a

company takes an action in changing the corporate image, it must first decide the specific

kind of image it wishes to attain. In order to achieve a new corporate image, the process starts

with changing the internal culture. This is exemplified by the following quote of the editor of

KCB Cascade, June 2003 issue.

...most members of the KCB Team are very much in synchrony with the objectives of the rebranding of KCB and are taking steps to deliver our Brand promise '“Making the dilference”. This is important

2 0

because for our new brand to succeed and gain requisite recognition, the people in the organization must live the values that the renewed organization stands for.”

ii) The other objective of a corporate communications program is the need to revise

programs, product lines and even corporate philosophies (Seitel, 1987). This was amplified

by Helen Kithinji, of KCB Retail Division in KCB Cascade, September 2004 issue, when

she underscored the importance of communication in a changing organization like KCB in a

quotation that ties with this objective.

“... Without effective communication, all the brilliant initiatives the band has embarked on will come to naught. Communication enhances, understanding, cooperation and teamwork, thereby driving the team forward.”

iii) Organizations initiate a program of corporate communication to prepare the stock market

for a new share issue or because a private company is going public. In agreeing with this

observation, Cutlip (1985) says:“...investors by their purchases and holdings of business stocks, bonds and notes tend to express confidence in a corporation, an industry or private enterprise system. Conversely, unwillingness to buy and hold these securities tend to express a lack of confidence, approval or support.”

This scenario was vindicated by KCB when it floated its Rights Issue between June and

August 2004 that were oversubscribed thus digging a niche in its corporate transformation

strategy. This prompted Kepha Bosire, KCB Head, Corporate Affairs, to comment in the

KCB Cascade, September 2004 issue on the successful Rights Issue that:

“Investors snapped up the Government rights at the Nairobi Stock Exchange as the KCB Rights began trading at the bourse in what heralded the success of the capital-raising exercise of the Kenya’s largest indigenous bank. The 17 million rights allotted to the Government on the ratio of 1:3 were grabbed within the first week of trading mainly because they were restricted to daily ration of 3 million rights, as there were clear signs of hunger among prospective buyers...While announcing the results of the Right issue, KCB Group Chairman, Susan Mudhune told a battery of journalists at a press conference that the rights had been oversubscribed by over KShs. 300 million, raising KShs. 2.75 billion against the expected maximum o f KShs 2.45 billion. A total o f 33,103 shareholders applied to take up their rights amounting to KShs 1.96 billion shillings while another 9,015 applied for additional rights worth KShs 800million.”

iv) Improving community relations is the other objective of a corporate communications

program. This can be as a result of public criticism based on the misunderstandings of the

company intentions. Jefkins (1992) says that for this to be realized, the practitioner or the

consultant has to exploit, encourage and integrate communications resources within the organization.

21

Further, Cutlip (1985), seems to concur with this view when he says that a professional must

at all times try to be involved in the formulation of policies and implementation of actions

with social impact. According to him, a practitioner must persuasively counsel the

management on the importance of good community relations. He advises that public interest

and corporate interest converge in the long haul and that this approach to corporate social

responsibility must take precedence over concerns about next quarter’s profit and loss

statement or annual sales report.

Betty Cott, executive vice-president of Ruder & Finn (USA) observed that corporate social

responsibility wins friendship for business. She was further quoted by Cutlip (1985) saying

the following about the public relations impact of corporate philanthropy:

“Surely, the contribution area is critical point for the preservation of relationships between corporations and the public. And any one of us who has heard the director of a non-profit organization report proudly on a new corporate grant recognizes the friendship that begins with such a move”

Back home, Ruth Mutua, the Headteacher, Machakos School for the Deaf had this to say about KCB corporate social contribution, in a letter to KCB Cascade, June 2003 edition,

“I am writing on behalf of entire community of the Machakos School for the Deaf, to appreciate the love and concern you have been extending to us. You know that the school looks more beautiful because o f the roof you painted. We were more touched by the sports equipment and the foodstuff you so generously donated as well as the day you spent with us.You may be pleased to know that we managed to enter the children in the just concluded ball games and gymnastics competition for regular primary schools. Your sports equipment went a long way in helping in the preparations. We would like to thank Mr. Daniel Musau for having picked us from the very many needy cases in this area and are also grateful to all members of your staff for your support. May God bless you.”

yIn furtherance of establishing good community relations, KCB partnered with various

organizations to launch a campaign dubbed “United Against Hunger” during a famine in

2004. KCB lead the initiative by making an initial donation of KShs 3 million. The editor of

KCB Cascade was exhilarated when he wrote in September, 2004 edition that

“ This is an opportunity for the KCB Team to demonstrate that they care and can make a difference in the lives of the suffering. It is not how much you give, but the fact that you spared something for those in danger of starving to death. That is why we must all rise to the occasion and support this initiative.”

v) Organizations initiate corporate communications campaign with an objective of regaining

confidence after a disaster, which had shown the company to be inefficient in some way, the

cause having been rectified.2 2

K.CB seemed to amplify this contention when Benjamin Kipkulei, the then chairman, was

quoted in KCB annual report and financial statement saying:

“ I present the 2002 financial statements with some disappointment as they reflect a large loss of KShs. 3 billion. However, I also believe that the steps that we have taken will stem any further losses from our historical non-performing loan book—

vi) Corporate communications programs are also initiated with an objective of supporting a

sponsorship scheme; sponsorship in the sense of providing financial support for worthy

subjects, causes and individuals (Jefkins, 1992).

In tandem with this observation, KCB has not been left behind in sponsorship of worthy

causes, events and activities during the period under study. It has supported the on going

prisons reforms which are being spearheaded by the Vice-President, Moody Awori. In this

regard, a KCB Cascade, correspondent had this to say in September 2004 edition:

“...KCB’s move was revolutionary and well timed; they mingled with the prisoners and donated tools for training. And that was not all because the IT department had to go an extra mile and gave inmates some tips on computing. ”

In present day’s world, corporate sponsorships may be undertaken for three different

purposes, which include advertising, marketing and public relations (Wilcox, 1997). Though

costly, Wilcox goes on to list the value of sponsorship in communication to include:

UNIVERSITY OF NAIROBI EAST AFRICAN A COLLECTION

♦ Winning good customer relations.

♦ Enhancing public goodwill.

♦ Establishing a corporate or product image

♦ Giving the organization a high visibility among key audiences that would be

interested in a product or a service.

♦ Generating news coverage.

2.7 Strategies in Corporate Communications

Organizations employ various strategies in communicating to their internal and external publics as here listed

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2 7.1 Communications to internal publics

i) Internal Publications

Over the years, the traditional supportive role ascnbed to periodical publication in an

organization has changed to being the major strategy to achieve organizational objectives. In

the past, their impact was considered as indirect but it is now viewed as direct and

measurable (Cutlip et al, 1985). Some of these publications include simple newsletters,

tabloid newspapers, wallpaper and news magazines, among others.

An organization’s internal publications are intended to facilitate employee communication.

They have major advantages, for example, ability to deliver specific and detailed information

to narrowly defined target publics. Some characteristics of these publications include:

♦ They satisfy the organizational need to go on record with its position and communicate

information essential for achieving organization objectives.

♦ They permit the organization to deliver messages to specific target audience.

♦ They let the organization communicate in its own words, in its way, without interruption

or alteration.

Cutlip et al, 1985, delineates four major functions of these publications, which include:

♦ Indoctrination

They welcome new employees members or visitors. This is an important function in that it

helps the newcomer to get off on the right foot. It spells out the rules of the organization and

the benefits of playing by the rules. It seeks to instill an attitude of team spirit by

communicating that the newcomer has joined a winning team.

This was amplified by the editor of KCB Cascade when he emphasized the importance of

team spirit among KCB staff after launching of the new bank’s brand in 2003:

■ ■ most members of the KCB Team are very much in synchrony with the objectives o f the rebranding KCB and are taking steps to deliver our Brand promise. “ Making the difference” this is important because for our new brand to succeed and gain requisite recognition, the people in the organization must live the values that the renewed organization stands for.”

24

* Reference

Most organization publications deal with the group insurance plans, pension plans

educational programs, organizational policies and procedures and facilities, among others.

These publications enable employees or members to look up specific information easily.

Sometimes they provide detailed information and instruction sought by the reader

» Institutional

The publications also spell out the organization’s philosophy, values and guiding principles

For example, messages related to national security and social responsibility. For instance

K.CB has been very keen in supporting the education of the disadvantaged in institutions

across the country.This was noted, by J. G. Kamweru, of Ruiru Branch, who had this to say on the subject of

education of disadvantaged children, in KCB Cascade, June, 2003 edition:

“Every child in a Care Home must have had a difficult past. They are either orphaned or rescued from broken homes. All they have known in their lives is abuse and mistreatment. A kind gesture will definitely leave an indelible mark in the heart o f the child and is most likely to be repaid in future in kind to another person.”

♦ Letters and bulletins

Letters and bulletins, which are written and addressed to employees in an organization, serve

a very important function in its internal communications. They serve as a supplement to the

slower, less frequently published employee magazine These letters and bulletins have any

advantage in that they offer an opportunity for the chief executive to communicate to

employees and their families in a conversational, personalized and news-manner. Their

economical, direct and individualized approach ensures the accuracy of information by

pointing out what is important and newsworthy in the organization’s affairs.

ii) Meetings

Meetings are very important in any organization, be it a big or small organization. They have

a vital function of bringing people together providing both opportunities to speak and

opportunity to listen.

25

In this regard, meetings require specific objectives, careful planning and staging as well as

skillful direction. Exchange of viewpoints can be open but controlled so that the meeting does

not drag or get diverted from its purpose. A meeting’s effectiveness depends on the

moderator’s ability to lead and articulate. In the event of a big gathering, for example, the

entire public relations staff could be called upon to plan the meeting

Examples of useful meetings in an organizations mclude, work group meetings, quality

control circles and participatory management sessions. These are small task-oriented

meetings, which are frequently used by the management for communicative purpose in the

organization. They may seem expensive, as they are time away from routine tasks but

economical in the long run in both the ideas they produce and team-building effects (Cutlip,

1985).

iii) Seminars and conferences

Seminars and conferences are organized for the company’s staff by the management. Such

events are aimed at making presentations to the staff to explain changes in the organization.

iv) Employee motivation

By motivating their employees, organizations communicate that they value them. This is

mainly done through presentation of awards to the best performers, salary increments,

awarding of scholarships and promotions, among others.

According to Baskin et al, 1997, effective employee communication^ is crucial to

organizational success and corporate communications staff can make great contributions in

this realm of communication. In exemplifying their contention, Baskin et al, quotes a survey

of corporate executive officers (CEOs), conducted by the International Association of

Business Communicators, as saying employee communication is a great motivation and it;44

••• continues to inch its way into corporate executive thinking.”

Further they observed, “In terms of corporate priorities, the vast majority of CEOs rated

employee communication in the “extremely important,” “very important,” or ’’tops”

categories.” One CEO was succinct by putting it this way:

26

“If employees understand what you’re trying to do and get involved in the process feeling like they’re really a part of it, then the job gets done much more easily and there are fewer grievances and fewer problems.”

v) The spoken wordThis entails giving of talks supported by audiovisuals like graphs, charts, overhead

* transparencies and slides to supplement their talks. This enhances better audience

understanding

2.7.2 Tools used in internal communications

The strategies stated above are actualized by use of some tools as identified by Jefkins,

(1992), which include the following.

♦ Controlled notice board

Organizations place notice boards in strategic places within the organization where the

management communicates to the employees through notices. Employees can also make use

of the facility to communicate among themselves or to the management. The board should be

made dynamic by being updated often. If the same information is seen on the board for a long

time, it engenders annoyance and soon leads to inattention.

♦ Video house journals

These are produced in-house by the organizations. They can be shown on business premises

or taken home via the domestic videocassette recorder or on the television screen.

7

♦ Audiotapes

News is recorded on small cassette tapes for listening by employees on cassette recorders in

the office, home or even in the car.

♦ Corporate video

In more developed countries corporate communication is conducted via private television

network, transmitted by satellite throughout the day to the premises of companies.

♦ Electronic newspapers

Organizations also communicate to their staff through electronic newspaper. These are

27

transmitted to personal computers with hard printers

2.8 Communications to external publics

Accordmg to Jefkrns F 1992, organizations have various strategies and tactics for

communicating to their external publics. These include:

i) Public relations tours

The organization executives can promote the image, products and services of the organization

by giving speeches and news conferences. They can also visit the various stakeholders that

their organization does business with.

KCB seemed to take the cue when Chief Executive, Davidson, started making public

relations tours to various organizations and businesses that are associated with his bank

across the country. In his letter to the staff, in the staff newsmagazine, KCB Cascade, June

2003edition, Davidson said:

“Over the past quarter, I have attended familiarization sessions with many business including visits to a large number of branches in Western Kenya, The Great Rift Area, Nairobi and Mombasa. In addition, I have met with most o f the businesses in the Head Office. My goal is to visit all branches and businesses in the KCB stable by the end of the year. Overall, I believe that I have developed a good sense of how we should position the bank for growth in the future.”

ii) Sponsorships

Companies spend millions on sponsorships. Sponsored events are popular because they give

the companies high visibility among key audience, they generate news coverage, bring

audiences and provide a focal point for marketing efforts and sales campaign. It is also cost-

effective than an advertising campaign.

Safancom, the leading mobile phone provider in Kenya, has been sponsoring The Lewa

Marathon for the last few years and this event has been attracting international attention.

Zaheeda Suleiman, who writes for the event’s organizers, Gina Dm Corporate

Communications (GDCC) wrote in The Option, Safaricom newsmagazine:

With over 570 runners and over 1200 spectators, from 19 different countries including USA Canada, Australia, China, Japan, Egypt, Uganda, Ethiopia, South Africa, France, Germany, Belgium, Denmark

2 8

and Switzerland. The atmosphere was exciting yet tense as everyone waited for the flag off by Guest o f Honour Hon. Mukhisa Kituyi. The minister for trade and industry.”

Writing on the same event in the PR Arena, the Journal of the Public Relations Society of

Kenya, Zaheeda added:

“... it was also decided that the marathon would be launched at Lewa, instead at the usual media conference at a Nairobi Hotel. This gave the media an opportunity to showcase what is involved in running the marathon and also the projects, which benefits from the event. Live updates of the marathon were consequently relayed to newsrooms. Over 12 media houses covered the marathon.

. among the VIPs who attended this year’s event were Speaker to the National Assembly, Francis Ole Kaparo, Minister of Gender, Sport, Culture and Social Services Hon. Najib Balala, and Assistant Minister for Agriculture Hon Joseph Nyagah. Others included world renowned marathon runners like Catherine Ndereba.”

iii) Sporting events

Sporting events are extremely popular and well funded by many corporations. Through

sponsorship of popular sporting events, organizations attract the recognition of huge

audience. They also reach specialized audiences, for example, manufacturers for affluent

customers, tailor their sponsorships accordingly. Wilcox et al, 1992 quotes an official of

Lexus, the luxury car division of Toyota, on why they sponsor Polo championships as saying:

“ Involvement in this event allows us to position the Lexus products line in the proper demographic segment.”

In the case of KCB, Susan Mudhune, the bank’s chairperson, had this to say about her

organization’s sponsorship of Safari Rally in 2003:V

“As Kenya’s premier indigenous bank, whose business benefits a great deal from the tourist inflows that follow the Safari Rally, we sponsored the Safari Rally 2003 at the popular Kenyan Coast. These two strong brands have worked well collaboratively. Both local and international observers heralded the event as a resounding success with World Class organization and a positive contribution towards a return of Kenya to the World Rally Championship.”

iv) Cause-related marketing

Companies dealing in highly competitive products and services often strive to distinguish

themselves by supporting causes that appeal to various market segments. American Express,

for example, promised its customers that if they used its credit card for purchases, 1 per cent

of the bill would be given to the statue of liberty restoration campaign cause (Wilcox et al, 1992).

29

Cause-related activities are used by corporations to communicate a company’s values and

corporate philosophy. For instance Michael Joseph, the CEO Safaricom, had this to say in the

Safaricom Magazine, The Option:

“In our effort to continue demonstrating passion for the world around us, Safaricom and Save The Elephant (STE) have entered a collaboration that will enable wildlife conservators and researchers monitor and access real time data on particular animals on a real time basis. Safaricom hopes to extend its superior technological know how to support such environmental initiatives among other sustainable development programs in Kenya. By employing Safaricom GSM links, researchers and other wildlife conservation organizations will now be able to accurately track and pinpoint where a certain herd of elephants fitted with this device are at any particular point.”

v) Product publicity

If presented properly, products can be newsworthy and can catch the eyes of reporters and

editors. Companies have found that product publicity is a cost effective way of reaching

potential consumers. Product publicity can be accomplished by placing information on new

products in food, auto, real estates, business, travel, and sports pages of newspapers as news

and feature stories. These cover the development and launching of new products and even

new uses for established products. Radio and television talk shows and consumer

programmes also contain large amount of product publicity.

vi) New technologies

The new Information Communications Technologies (ICTs) have greatly increased

organizations’ capabilities to gather, process, transfer and analyze information from their

diverse publics. In modem day’s corporate communications practice, an organization must/

strive to be on the cutting edge of new communications technologies. This enables the

organization to deliver and process information from and to its publics fast and efficiently. In

a letter to KCB staff, Terry Davidson, the bank’s chief executive, noted:

We have spent time revamping our technology platform and I am pleased with the progress so far made. ATM uptime has increased steadily to a commendable 93% and we have recently taken steps towards “one-bank” concept. In addition, the technology infrastructure is better managed today to ensure that we have more reliable system availability to enable us to meet the ever-increasing customer needs.” (KCB Cascade June 2003).

According to Jabir Abbas, in an article in KCB Cascade June 2003 edition, companies invest

in Information Technology (IT) security to put measures in place, which eliminate or reduce

30

significant threats to acceptable level. IT security in a business organization like KCB,

according to Abbas, ensures:

a) Confidentiality

This means sensitive business information and process are disclosed only to authorized

persons. Controls also restrict access to files and data.

b) Integnty

This, concerns needs to control modification to information and processes. Controls are

required to ensure files and data are accurate and complete

c) Availability

This refers to the need to have business information and services available when needed.

Controls are required to ensure reliability of services.

As if to ascribe to Jabir Abbas, above, Wilcox et al (1992) cautions that unwise use of

technology, for example, electronic response may alienate the very people the company needs

to please. Customers are not amused by the cliche answer, “it was a computer error.” It is

common sense that mistakes on computers are as a result of errors committed by the

operators of the machines. It is therefore important that corporate public relations

practitioners exercise their influence on management so as to maintain the human touch.

/vii) Community social responsibility (CSR)

Community social responsibility (CSR) encompasses and communicates the business

organizations’ efforts to solve social problems. If done properly, solving social problems is

both good business and good citizenship

CSR is hinged on recognition of the need to communicate that business plays a vital role in

any society. The flip side is that business cannot prosper and grow unless the society also

prospers and grows. Corporations worldwide are increasingly getting sensitive to the social

nnpact of their decisions and activities.

31

For example, Safaricom the leading mobile phone provider in Kenya formed: The Safaricom

Foundation, a charitable foundation to articulate and implement its social investment policy.

Michael Joseph, Safaricom’s CEO wrote in The Option, the organization’s news magazine,

April to June edition 2004:

“ Since its inception, Safaricom Limited has been at the forefront of sponsoring charitable activities and supporting worthy causes. Given the positive reception by Kenyans to our philanthropic activities, it was thought best by the company to follow the lead set by other subsidiaries and associate companies of the Vodafone Group by establishing a charitable foundation to articulate and implement its social investment policy. This has led to the formation of The Safaricom Foundation...”

Cutlip et al, (1985) quoted former chairman of Dow Chemical’s (USA) as havmg this to say

about the tenets of Corporate Social Responsibility:“The business community’s efforts to solve social problems must be integrated with long-term profit

growth. If done properly, solving social problems is both good business and good citizenship, for the two goals are wholly compatible.”

viii) Polishing the corporate image

Most organizations are extremely sensitive about the way they are perceived by their publics.

A positive corporate image is essential for continued long-term success of an organization

(Seitel, 1987). Similarly, a firm attains its corporate image by the services and products it

offers to its publics, the profits it makes, the performance of its stocks in the market and

investment on technology.

For example, when thunderstorms knocked out electric services for a prolonged period during

a July heat wave, the Baltimore Gas and Electric Company gave 7000 customers free dry

ice to preserve their perishable foods. The result was a perception that the company cared

about its customers. (Wilcox et al, 1992)

ix) The Annual Report

The annual report has been referred to as the company’s key financial communications tool.

It is used by companies to provide a more detailed data on their individual lines of business,

financial structure and foreign operations.

Through the annual report, companies promote their views on vanous topics, for example,

environmental protection, community social responsibility and many others. The report is the

32

basic marketing tool of the organization, builds image and provides product and financial

data for analysts, customers and investors.

2.9 Corporate Communications Strategies that KCB put in place during its transformation

The corporate communication strategies that KCB put in place on the road to its

transformation were well thought out. It consulted a leading public relations and advertising

agency to research and analyze its problems. Consequently, the communications strategies

and solutions it put in place were based on the problems analyzed.

The following were the strategies and solutions.

i) Transformation of visual image

KCB was perceived as complacent when compared with its competitors, mainly the Barclays

and Standard banks. The latter were looked at as modem and progressive. KCB had a visual

image that was, firstly, perceived as dull, for instance, its banking halls had not been

refurbished for a long time, and they looked ‘colonial’ in the sense that metal grills still

separated the staff and the customers. Besides, the halls had not been painted for a long time.

Several changes were put in place to give the bank a modem look. This was preceded by

allocating KShs 3 billion for refurbishment of its branch network across the country.

Prior to transformation, its corporate colors were black, red and green. Its corporate symbol

was a lion icon in black. After research on the corporate visual image, black was found to be

dull and hence done away with. Red was perceived as the color of danger and it was also

gotten rid off. Green was perceived positively in that it was seen as warm, friendly, honest

and as the color of nature, nobody hates it.

Green was thus made the prominent corporate color of KCB The lion was retained, as it was

perceived as symbol of strength, stability, and confidence. However, it was given a new font

and color, its color changed from black to blue. The blue color was added, as it was perceived

as the colour of confidence and stability.

33

ii) Transformation of corporate image

KCB’s corporate image was perceived as conservative. Members of the public also looked at

the bank as a parastatal, which was interpreted to mean that it was not well managed,

bureaucratic, corrupt and governmental In order to change this negative image, new

management team, poached from successful corporates, led by Terry Davidson was put in

place. This was coupled with an advertisement campaign for its products and services with

new corporate promise of “making the difference” and "getting better and better everyday.”

Having done this, KCB went ahead to launch a Rights Issue in June 2004 in order to raise

KShs 2.45 billion from its shareholders and other members of the public. The issue was

oversubscribed by KShs 300million. This vindicated the bank’s efforts to acquire a new

corporate image.

iii) Development of Corporate Social Responsibility policy (CSR)

KCB was viewed by a majority of the members of the public as an organization that doesn’t

do much for the society. Very few people knew that KCB helped the society To alter this

perception, the bank developed a CSR policy that was to be accompanied with a much more

enhanced publicity of its CSR activities than ever before.

KCB took cognizance of the fact that corporate social responsibility has become an important

area of corporate contribution to the society. By contributing a little of its profits to the

society, KCB communicated that it cared. It is on this premise that KCB went out of its wayy

to set aside a community day and a week respectively each year. During these two events

staff donate to charity and participate in helping the needy in the communities where they

operate.

For example, KCB CSR theme for the year 2003 was “supporting the education o f the

disadvantaged"’. Towards this end, the bank’s staff constituting 122 teams from all the

branches countrywide, handsomely donated to institutions catering for the education of the

less fortunate children countrywide.

34

Similarly, during the bank’s community week, in 2003, the bank’s staff provided several

services to the communities, which included environmental clean up, and cleaning and

painting of children’s homes. They also donated books and stationery to children’s homes.

iv) Sponsorships

In the past, KCB used to sponsor inconsequential activities and events, which never gave it

high visibility among key audiences. These activities and events also did not generate enough

news coverage for the bank. In the period under study, KCB sponsored several major events,

which attracted considerable news coverage besides attracting big audiences. Among the

most prominent of these events was the KCB Safari Rallies in 2003 and 2004.The bank is

also sponsoring the same event in 2005 and all the rallies in the Kenyan National Rally

championship calendar.

v) Positioning of KCB staff to the media

To communicate to the public that it was a transformed organization, KCB embarked on a

deliberate policy of making its staff and activities visible to the media. In this regard both the

Chairperson and CEO, Susan Mudhune and Terry Davidson respectively, were prominently

given coverage by the media many times as they officiated in the bank’s activities and events.

This culminated with the election of Davidson as the chairman of the Kenyan Bankers

Association in the year 2004.

In April 2003, the bank launched its new corporate identity and logo to the public. To make

sure the public got a communication of this, it ensured that the event was well covered by the

media as it marked a turning point in the direction the bank was going to take from then on.

Media and key clients were called upon to ask questions during the event. This was followed

by advertising on billboards, posters in its banking halls across the country and in ATM

lobbies and also in both print and electronic media

vi) Development of internal goodwill

Communication was used to develop internal goodwill in preparation for transformation.

All the staff from the tea girl to the senior managers were trained on the new brand in framing

sessions dubbed “getting better and better,” event. The employees were trained to change

with the brand and made to be part of tire difference at KCB. For example, they were trained35

to improve customer care; there was development of customer service programs and

introduction of customer service awards to motivate employees to serve the customers better.

On top of this, the Corporate Affairs department came up with the “Difference Magazine,” to

update the staff on what was expected of them in the transformed KCB.

vii) Channel

KCB had a large network of branches across the country. However, their visual image was

not appealing to the customers, for instance, they looked old and ‘colonial’, while its ATM

network was not reliable.

The solution to this was to refurbish its branch network starting with those m Nairobi. The

bank rolled out more ATMs across its branch network across the country and ensured that

unlike in the past, they were more reliable.

This was clearly exemplified by launching of the remodeled Sarit Center branch in Nairobi in

April 2004. Terry Davidson, KCB Chief Executive, had this to say in relation to these

changes during this event:

"... The continuing branch reconfiguration fitted perfectly in bank’s 3-year strategic plan, a multi­

faceted broad based project dubbed “project Mteja.” This plan envisages turning our branches into

retail outlets by taking out much of the operational processing, upgrading the IT and communications

and then refurbishing them. “(Daily Nation /Tuesday April 27, 2004)

This process of reconfiguration of its branch network and centralization of processing of its

activities and modernization of the bank’s IT system put the bank on the cutting edge of

modem technology. This then enabled KCB to compete effectively with both Barclays and

Standard Banks, which were the market leaders.

viii) Product realignment

KCB was perceived as lacking innovation in its products as opposed to its competitors. For

example, it did not have a personal loan product, which had become the vogue in the local

banking industry. There was also a general lack of information about some of its products, for

instance, its debit cards.

36

To keep abreast with its competitors, KCB introduced new products, which included personal

loan, new savings accounts besides improved publicity In the area of products’ materials, the

bank churned out quality and better-look brochures, ATM cards, cheque books and debit

cards, among others.

ix) Customer motivation

The bank had a problem of maintaining its customers. It had many young customers

especially students or first time employees who on attaining financial stability opted to move

to its competitors, the Barclays and Standard banks. The latter were perceived as modem,

progressive and prestigious. The other major clients of KCB were parastatals and government

institutions like schools, which by the virtue of being government bodies had been coerced to

bank with KCB.

To motivate and attract young people especially middle-income earners to the bank, KCB

improved its products by making them more attractive as exemplified by improved colour

and texture, among others. Besides this, these products were given intense publicity than in

the past. Other areas focused were refurbishment of its branches and improved customer

service, which manifested by increasing the ATM network and reliability.

In conclusion, Corporate Communications played a crucial role in the actualization of the

above strategies and consequently in helping the bank to adjust and adapt to the challenges

that it was facing. The communication process was split into two:

a) The first one entailed positioning KCB as a progressive bank, which culminated to the

coining of the corporate promise, 'making the difference' and ‘we are getting better and

better everyday.’

b) The second function of communication was advertising. The bank put in place a blitz of

advertising campaign, which was multifaceted. For example, in the electronic media, the

TV, as a visual media was used to communicate the new look KCB, while radio, on the

other hand, was used to reach the core KCB customers, who are rely on radio for

information.

2.10 THEORETICAL FRAMEWORK

This study is based on learning theory as championed by B. F. Skinner and Albert Bandura37

The study also draws from Systems theory as propounded by Miller G. James as quoted by

Cutlip et al, (1985) to organizational management and specifically as it relates to corporate

communications in a transforming organization.

2.10.1 Learning Theory

Learning is one of the fundamental processes underlying behaviour and, in turn, motivation.

Most behaviours in organizations are learned. For example, perceptions, attitudes, goals, and

emotions are learned

Learning is a process by which a relatively enduring change in behaviour occurs as a result of

practice. Different theorists have proposed various explanations as to how learning may

occur. This study will be based on operant c o n d it io n in g /le a r n in g b y B. F. Skinner and s o c ia l

lea rn in g by Albert Bandura.

Skinner says that learning occurs as a c o n s e q u e n c e o f o n e 's b e h a v io u r . Here one increases

performance of behaviours that are reinforced and decreases those that are negatively

rewarded or non-reinforced.

Bandura on the other hand, says that learning occurs chiefly through o b s e r v a tio n and the

m en ta l p r o c e s s in g of information after observing behaviour of others, whom he called

models. Bandura called this type of learning v ic a r io u s le a rn in g . One learns both positive and

negative behaviours. He delineates f o u r f a c to r s that are necessary for learning to take place.

These are a tte n tio n to the model’s actions, re m e m b e r the model’s actions, a b i l i ty to produce

the actions and m o tiv a te d to perform the actions.

In underscoring the importance of the learner in learning, Bandura introduces the concept of

self-efficacy, which according to him is central in social learning theory. He describes self-

efficacy as a belief that one can perform adequately in a particular situation.

2.10.2 Systems theory

Miller G. James as quoted by Cutlip et al, (1985) propounded the systems theory. He

contended that changes and their impact on organizations require a systems approach for

corporate communications. This is so because mutually dependent relationships are38

established and maintained between organizations and their publics. Organizations change by

adjusting and adapting, which employ concepts and propositions from systems theory

Further, Miller looks at a system as a set of interacting units that endures through time within

an established boundary by responding and adjusting to change pressures from the

environment to achieve and maintain goal states.

In the case of corporate communications, the set of interacting units include the organization

and the publics with which it has or will have relations. They are somehow mutually affected

or involved In this regard, organizations must continually adjust their relationships with

publics in response to an ever-changing millieu'

Additionally, organizational-publics relationship change in response to environmental change

pressures. If they do not change, old relationships become dysfunctional because the

organization acts and reacts in ways inappropnate to the new circumstances. If they are

unmanaged and non-purposive in their responses to environmental changes, systems tend to

degenerate to maximum disorder, what systems theonsts call “entTopy”. In social systems this

means that coordinated behaviour to attain mutually beneficial goals is no longer possible. In

effect, systems break up. Corporate communications are charged with keeping organizational

relationships in tune with mutual interests and goals of organizations and their publics.

Miller continues to say that systems engage in exchange with their environments, producing

changes in both the systems and their environments. Such changes occur in the processes,

structural change and adaptation, which capture the essence of the corporate communications

function in organizations. Specifically, corporate communications is part of what

organization theorists call the adaptive subsystem, which is distinct from the production,

maintenance, innovation and managerial subsystems. Consequently, this implies that

corporate communications is equally important and it is here to stay!

39

/

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

This is a survey study that was carried out using systematic sampling method to collect the

data. Self-administered questionnaires, which contained items that were, both open and close-

ended were used. Key informant interview was also used The data collected has been used

to illustrate the impact, Corporate Communications Strategies of Kenya Commercial Bank

(KCB), had over its newly acquired transformation.

3.2 Site selection

The study, which targeted both the staff and customers of KCB, was carried out in 10 KCB

branches in Nairobi from August 2004 to August, 2005.

Nairobi was chosen because of the following factors. Firstly, because of its cosmopolitan

nature of the subjects and their diversity. Secondly, the transformation of KCB started with

its Nairobi branches and therefore the study assumed that the impact was first noticed and felt

here. Thirdly, it was only KCB branches in Nairobi that were technologically transformed,

for example, all the branches had been interlinked at the time of the study.

The study also took cognizance of the fact that no other town in Kenya had as many KCB

branches as Nairobi. For example, out of 95 KCB branches countrywide mcjuding satellite

branches at the time of the study, 19 of them were in Nairobi. The other factor that dictated

the choice of Nairobi was limited resources and time constraints on the part of the researcher.

As mentioned above, the study was carried out in 10 KCB branches in Nairobi, namely:

Anniversary Towers, Kipande House, Eastleigh, Jogoo Road, Industrial Area, Capitol Hill,

Village Market, Moi Avenue, Card Centre and Tom Mboya branches.

3.3 Sample Population

60 members of staff from KCB were sampled and inducted into the study, while 120 bank

40

customers formed the other part of the study population. Further, 4 key informant

respondents were inducted into the study.

3.4 Sampling procedures

As mentioned above, the study sampled 60 members of staff from a population of 1200 staff

members in KCB branches in Nairobi. The subjects were systematically sampled to ensure

the law of statistical regularity was adhered to In this case, a staff register was used where

every 3rd member of staff was inducted in the study. This means that in all the ten branches

that were sampled, only 6 members of staff were inducted into the study from each branch.

On the other hand, the customers were given the questionnaires randomly as they entered the

banking halls. To give an equal opportunity to as many customers as possible, the

questionnaire was given to every 5th customer as he/she entered the banking hall. The

subjects were then requested to fill the questionnaire after they had been served and surrender

it back to the researcher or his assistants. In this regard, it is only 120 subjects who accepted

this condition and were thus inducted into the study. This in essence translated into 12

customers for every of the ten branches sampled

To enable corroboration of the views of both the staff and customers, Key informant

respondents were selected. This was done on the basis of their human resources and

communication positions that they held within the bank, as they were thought to be

knowledgeable in the area of study. In this respect, the following were chosen: director/

human resources, senior human resources manager, corporate affairs manager and assistant

corporate affairs manager.

However, at the time of collecting the data only the senior human resources manager was

available for the interview. Inspite of the absence of the other managers, it occurred that this

manger happened to have been involved from the beginning of the transformation to the end,

unlike the other managers targeted in the study. This qualified his contribution.

3.5 Data collection

The researcher, with the help o f research assistants, distributed the questionnaires to the staff

members. The questionnaires were then collected later after they had been filled.41

As for the customers’ questionnaires, the subjects were requested to fill the questionnaire

within the banking halls before being served or thereafter All the questionnaires from the

customers were collected immediately after they were filled, as this was a one-time

opportunity to see the subjects.

For the key informants, only the senior human resources manager was interviewed as cited

above.

S'

42

CHAPTER FOUR

RESEARCH FINDINGS

4.1 IntroductionThe study used statistical method of data analysis to generate frequency tables The

frequencies were expressed in percentages, as each questionnaire of the two sets of

respondents, namely the members of staff and the customers, were analyzed. The

questionnaires were analyzed in this order.

4.1.1 Demographic findings of the staff

4.1.2 Response rate

Out of 60 respondents interviewed in the study, 40 members of staff returned the

questionnaires duly filled and in good time for analysis. Figure 4.1.3 and Tables 4.1.4 to 4.1.6

below, illustrate their demographic characteristics.

4.1.3 Gender distribution

Figure 4.1.3 below indicates that 40 percent of the respondents were males while females

constituted the largest 60 percent of those interviewed.

Table 4.1.4 • Age distributionAge distribution Frequency Percent

Under 25 0 0

26-40 14 35.0

41-50 16 40.0

Over 51 years 10 25.0

Table 4.1.4 above indicates that majority of the respondents, who constituted 40 percent; fell

the forty one to fifty years age bracket while 35 percent represented those in twenty-six to43

forty years age bracket. Those over fifty years and above represented 25 percent Those under

twenty-five years were not represented.

4.1.5 EducationEducation Gender o f

respondents

1

Male Female F requency Percent

Primary 0 0 0 0Secondary 2 6 8 20.0College 8 8 16 40.0University 6 10 16 40.0

80 percent of the respondents in Table 4.1.5 above were of college and university education,

while 20 percent were of secondary education. None of the respondents were of primary

education

4.1.6 Job titleJob title Males Females Frequency PercentAccountant 3 5 8 20.0Clerk 3 4 7 17.5Teller 3 3 6 15.0Administrator 1 5 6 15.0Manager 2 2 4 10.0Secretary 2 2 4 10.0Supervisor 0 3 3 7.5Personalbanker

2 0 2 5.0

According to Table 4.1.6 above, majority of the respondents who represented 20 percent were

accountants with clerks taking the second position with 17.5 percent. Tellers and

administrators occupied the third position with 15 percent each, while fnanagers and

secretaries occupied fourth position with 10 percent. Supervisors represented 7.5 per cent

while personal bankers took the last position with 5 percent.

4.2 (a) Period worked for KCB

Job T itleP eriod w ork ed in years F requency PercentQ-5 6 -1 0 11-15 20 and

aboveAccountant 0 3 2 3 8 20.0Clerk 1 4 1 1 7 17.5Teller 2 2 2 0 6 15.0Administrator 1 3 2 0 6 15.0Manager 1 1 2 0 4 10.0Secretary 2 1 1 0 4 10.0Supervisor 0 1 1 1 3 7.5Personalbanker

1 1 0 0 2 5.0

44

Table 4.2 (a) above illustrates that 20 percent of the respondents, who were the majority,

were accountants and had worked from 6 to 20 years and above. Clerks were second

accounting for 17.5 percent of the respondents and had worked below 5 to 20 years and

above. Tellers and administrators were third with 15 percent each having worked below 5 to

15 years

Managers and secretaries followed in the fourth position with 10 percent each, both having

worked below 5 to 15 years. Supervisors took the seventh slot with 7.5 percent and they had

worked from 6 to 20 years and above, while the personal bankers came last with 5 percent

having worked below 5 to 10 years.

Table 4.3 (a) Staff trained before the transformation

Job title E ducation S ta fftrained

Frequency

P ercentagetrained

P rim a

*yS econ d a

ryCo Heg

cU n iversi

_ ___Y es N o

Accountant 0 0 5 3 8 0 8 20.0Clerk 0 3 3 1 6 1 7 15.0Administrator 0 0 2 4 6 0 6 15.0Teller 0 2 2 2 5 1 6 12.5Manager 0 0 0 4 4 0 4 10.0Secretary 0 2 2 0 3 1 4 7.5Supervisor 0 1 2 0 3 0 3 7.5Personalbanker

0 0 0 2 2 0 2 5.0

Frequency 0 8 16 16 37 3 40

/9 2 .5Total trained in percentage

An overwhelming 92.5 percent of the respondents in Table 4.3 (a) above were agreed that

staff training was carried out before the transformation, while 7.5 percent said they were not

trained Among those trained, the majority were accountants and represented 20 percent of

the respondents and had college and university education.

Clerks and administrators tied in the second position, as one clerk was not trained thus each

had 15 percent. The education of the clerks ranged from secondary to university, while that

of tellers was from college to university.

Tellers were third representing 12.5 percent of the respondents though one was not trained

and were educated from secondary to university. The fourth position was taken by managers,

45

who were all university educated, with 10 percent. The fifth position was shared by

secretaries and supervisors each accounting for 7.5 percent. However, one secretary was not

trained. The education of these two groups ranged from secondary to college. The last

position was occupied by personal bankers who were university educated with 5 percent.

Table4.3 (b) Usefulness of training in transformation

Job title E ducation U sefu ln ess o f train ing

Primary

Secondary

College University

FREQUENCY

Stronglyagree

Agree Notsure

D isagree Stronglydisagree

Accountant 0 0 5 3 8 i 7 0 0 0Clerk 0 2 3 2 7 0 6 1 0 0Teller 0 3 1 2 6 0 6 0 0 0Administrator 0 1 3 2 6 1 5 0 0 0Manager 0 0 1 3 4 0 3 1 0 0Secretary 0 1 3 0 4 0 3 1 0 0Supervisor 0 1 0 2 3 1 2 0 0 0Personalbanker

0 0 0 2 2 0 2 0 0 0

F R E Q U E N C Y 0 8 16 16 40 3 34 3 0 0

PERCENTAGE 7.5 85.0 7.5 0 0

According to Table 4.3 (b) 92.5 percent of the respondents agreed that the training helped

them in coping with the bank’s transformation. However, 7.5 percent were not sure. The

respondents’ education and job titles were tabulated but percentages were not pointed out as

they appear in table 4.3 (a) above.

The reasons cited for the usefulness of the training included: some gained moreskills in the

operations of the bank, while others were prepared psychologically. Another section became

more informed about what was expected of them and others became better workers besides

adjusting to what the new management expected of them. However, 3 respondents who

represented 7.5 percent said they were not sure of the usefulness of the training offered before

the transformation. It was difficult to say why they said this as no reasons were given as

requested in the questionnaire.

46

4.3 (c) Usefulness of training in motivation

J o b title E d u c a tio nF req uency

A geb rack e t

U sefu lness o f tra in in g in m o tiv a tio n

P rim ary Secon C o lie

g*

U n ivers ity

S trong lyag ree

A g ree N otsure

D isag ree S tro n g lyd isag ree

A ccountant 0 0 4 4 8 26 -40 0 8 0 0 0C lerk 0 2 3 2 7 2 6 -4 0 0 7 0 0 0T elle r 0 2 2 2 6 26 -40 1 4 0 1 0

A dm in istra to r 0 2 2 2 6 A boveS t 0 6 0 0 0

M anager 0 0 0 4 4 4 1 -5 0 A bo v e5 1

4 0 0 0 0

Secretary 0 1 2 1 4 26 -40 3 0 1 0 0

Supervisor 0 0 2 1 3 A bove51 0 0 1 2 0

P ersonal banker 0 1 1 0 2 26 -40 2 0 0 0 0

FR E Q U E N C Y 0 8 16 16 40 10 25 2 3 0

P E R C E N T A G E 25.0 62 .5 5.0 7.5 0

87.5 percent ofthe respondents inTable 4.3 (c) above agreed that the training motivated them

to work harder. Interestingly, 7.5 percent disagreed with this position, while 5 percent were

not sure. As the questionnaire had not provided for explanation of such response, none were

thengiven. UNIVERSITY OF NAIROBIEAST AFRICANA COLLECTION

Table 4.4 (a) Effectiveness of communications strategies

Job title E ducation E ffectiveness o f strategies

P rim a ry S econdary

C o lleg e U n ivers i

*yF R E Q U E

N C YS trong ly

ag reeA gree N ot

su reD isag ree S tro n g ly

d is a g re e

A ccountant 0 0 5 3 8 3 5 0 0 0Cleric 0 2 3 2 7 4 3 0 0 0T elle r 0 2 2 2 6 2 2 0 l lA dm in istra to r 0 0 4 2 6 1 5 0 0 0M anager 0 1 0 3 4 1 3 0 0 0S ecretary 0 1 2 1 4 0 1 1 v l 1Supervisor 0 1 0 2 3 1 2 0 / 0 0P ersonal banker 0 1 0 1 2 0 2 0 0 0F R E Q U E N C Y 0 8 16 16 40 12 23 1 2 2

PERCENTAGE 30.0 57.5 2.5 5.0 5.0

It is true according to 87.5 percent of the respondents in Table 4.4 (a) above, that

communications strategies used by KCB were effective. However, 10 percent disagreed,

while 2.5 percent were not sure. Again the respondents had not been requested to explain

their answers in the questionnaire.

47

4.4 (b) Communications strategies used by KCB

C om m unication strategies used

M ale F em ale F requency

Training 3 6 9Video shows 4 4 8E-mail 2 6 8Circulars 4 3 7Workshops 0 6 6Meetings 2 3 5Newsletters 2 3 5Fax 0 3 3Telephone 0 3 3Memos 2 0 2

Table 4.4 (b) above elicits the communications strategies used by KCB However, it is

difficult to get percentages of each strategy as majority of the respondents mentioned more

than one strategy. In this regard, the strategies as shown above, indicated that training

followed by video shows and E-mail were the most used followed by the others with memo

being the least used.

Table 4.5 Sensitivity in communications

J o b title E d u c a tio n S en sitiv ity in com m un ication

P r im a ry S eco n d ary C o lle g e U n iv e rs ity

F R E Q U ENCY

S tro n g lya g ree

A gree N otsu re

D isag ree S tro n g lyd isag ree

A ccountant 0 0 5 3 8 3 5 0 0 0Cleric 0 2 3 2 7 3 4 0 0 0

T e lle r 0 2 2 2 6 2 2 1 1 0

A dm in istra to r 0 0 4 2 6 1 5 0 0 0

M anager 0 1 0 3 4 1 3 0 0 0

S ecretary 0 1 2 1 4 0 1 1 1 1

Supervisor 0 1 0 2 3 1 2 0 0

Personal banker 0 1 0 1 2 0 2 0 0 0

FR E Q U E N C Y 0 8 16 16 40 11 24 2 2 1

P E R C E N T A G E 27.5 60 .0 5.0 5.0 2.5

According to Table 4.5 above, 87.5 percent of the respondents agreed that KCB showed

sensitivity in its communications during the transformation. Unlike the majority, 7.5 percent

disagreed, while 5 percent were not sure.

When asked to explain their answers above, the respondents gave various responses. Some

said that the management had tried to transform the bank and it was better than before. Others

opined that all the staff members were sensitized and trained, regardless of status, about the

expected changes and the reasons for the change. However, a section of the respondents said

48

that the bank should have employed more staff, for they were overworked, besides critically

looking into their welfare.

Table 4.6 Improvement of the working environment

Job title Improvement the working environment

Stronglyagree

Agree Notsure

Disagree Stronglydisagree

Accountant 2 6 0 0 0C lerk 2 4 0 0 1Teller 2 3 0 1 0A dm inistrator 1 5 0 0 0M anager 1 3 0 0 0Secretary 0 1 1 1 1Supervisor 1 2 0 0 0Personal banker 0 2 0 0 0F R E Q U E N C Y 9 26 1 2 2PE R C E N T A G E 22.5 65.0 2.5 5.0 5.0

A convincing 87.5 percent of the respondents in Table 4.6 above agreed with the statement

that a transformed KCB had improved the overall-working environment. 10 percent on the

contrary disagreed with this position, while 2.5 were not sure.

In their response to explain their answers above, the respondents said that banking halls are

now better looking. Similarly, there was improved decor, which enhanced the working

environment, while computerization made working easier. Others observed that they were

motivated to work harder than before while others said they should have been consulted

before the transformation. Yet still, a section said a lot needed to be done, y/ith some

expressing their dissatisfaction with the discrepancy in the allowances and benefits of both

senior and junior staff.

4.2. (b) Demographic statistics of the customersThe study had 120 customers. Figure 1 and Tables one to four below illustrate their

demographic characteristics.

Fig.4.2.1 Gender distribution

Fig 4.2.1 below indicates that 70 percent of the respondents were males while females

constituted the remaining 30 percent of those interviewed.

49

Table 4.2.2 Age distributionA ge D istr ib u tion F requency Percent

Under 25 34 28.3

26-40 57 47.5

41-50 26 21.7

Over 51 3 2.5

Table 4.2.2 above indicates that majority of the respondents, who constituted 47.5 percent fell

in the twenty-six to forty years age bracket. While 28.3 percent represented those in under

twenty-five years bracket with 21.7 percent falling in the forty-one to fifty years bracket.

Those in the fifty-one years and above bracket were represented by a paltry 2.5 percent

Table 4.2.3 EducationE ducation S ex o f respondents

M a le F em ale F requency P ercen t

Primary 0 0 0 0Secondary 16 4 20 16.7College 16 12 28 23.3University 52 20 72 60.0

Table 4.2.3 above indicates that the majority of the respondents; 60 percent were of

university education while 23.3 percent were of college level education. Only 16.7 percent of

respondents were of secondary education and none was of primary level of education.

50

Table 4.2.4 Employment status

E m p loym en tstatus

S ex o f respondentsM ale F em ale F requency Percent

Employed 52 20 72 60Self-employed

13 11 24 20

Any other 20 4 24 20

As Table 4.2.4 above indicates, 60 percent of the respondents were employed On the other

hand, 20 percent of the respondents were self-employed The remaining 20 percent fell under

any other - this category comprised mainly of students.

Table 4.2.5 Period one has been a customer

Period one has been a cu stom er

S ex o f respondentsM ale F em ale F req u en cy Percent

1-2 years 27 17 44 36.73-6 years 32 12 44 36.77-10 years 16 8 24 20.011 years and above 8 0 8 6.7

As KCB transformation started in year 2002, Table 4.2.5 above indicates that 36.7 percent of

the respondents became customers during this period. The other 36.7 who fell in the 3 to 6

years bracket have unquantified customers who joined the bank during the period under

study. While 20 percent of the respondents had been customers for a period of 7 to 10 years

with those of 11 years and above representing only 6.7 percent of the respondents.

Table 4.2.6 Government shareholding inhibited growth

G overn m en t S ex o fsh areh old in g respondentsin h ib ited grow th M ale F em ale F req u en cy P ercen tStrongly agree 36 20 56 46.7Agree 44 12 56 46.7Not sure 4 4 8 6.7Disagree 0 0 0 0Strongly disagree 0 0 0 0

According to Table 4.2.6 above, 93.4 percent of the respondents said that KCB was not ran as

a business concern as a result of the government being the main shareholder Those

respondents who were not sure of the statement were only 6.7 percent.

51

Table 4.2.7 (a) KCB has introduced m any products and services lately

W h eth er K C B has in troduced products and services

M ales Fem ales F requency P ercent

Yes 80 32 112 93.3No 4 4 8 6.7

Table 4.2.7 (a) above illustrates that according to 93.3 percent of the respondents, KCB had

introduced many products and services, while a paltry 6.7 percent disagreed.

Table 4.2.7 (b) Channels through which one learned about these products and services

C hannels S ex o f respondentsM ale F em ale F requency P ercent

TV 20 3 23 19.2Radio 18 3 21 17.5KCB brochures 12 9 21 17.5Newspaper 17 1 18 15.0Friends and colleagues banking with KCB

4 9 13 10.8

KCB road shows 2 9 11 9.2KCB posters 8 0 8 6.6Any other, specify 3 2 5 4.2

When asked the channels through which they learned about the new products and services,

19.2 percent of the respondents as shown in Table 4.2.7 (b) above, cited television while

radio and KCB brochures followed closely each with 17.5 percent. Those who learnt through

newspapers constituted the third highest percentage of 15 percent. The rest followed in the

following order: through friends and colleagues banking with KCB, 10.8 percent, KCB road

shows 9.2 percent and KCB posters, 6.6 percent. Those under: Any other, specify -

constituted 4.2 percent. Under this category were ATMs, visit by KCB employees and

rebranding of bank colours.

Table 4.2. 8 Sources of influence to bank with KCB

Sources o f influence to bank with KCB

Sex o f respondentsMale Female Frequency Percent

A dvertisem ents by K C B 31 14 45 37.5Products and services o f K C B 23 8 31 25.9Friends and colleagues banking w ith K C B

14 10 24 20.0

N e w co rpora te colours and identity o f K C B

10 2 12 10.0

A ny o ther, specify 5 2 7 5.8R oad show s by K C B 1 0 1 0.8

52

According to Table 4.2.8 above, 37.5 percent of the respondents were influenced by

advertisements by KCB. While products and services of KCB influenced 25.9 percent

followed by friends and colleagues banking with KCB at 20 percent. Other factors included,

the new corporate colours and identity of KCB, which accounted for 10 percent, others 5.8

percent. Under this category of others, respondents mentioned - “nearness of the bank to my

business” and “ its spread in the country”. Of least influence were road shows by KCB, which

accounted for 0.8 percent.

Table 4.2.9 (a) Happiness with products and services offered by KCB lately

H appiness w ith products and services

M ales F em ales F requency Percent

Yes 76 24 100 83.3No 4 16 20 16.7

Table 4.2.9 (a) above indicates that 83.3 percent of the respondents were happy with the

products and services offered by KCB lately, while 16.7 percent were not.

When asked to explain their answers above, the Yes respondents cited unsecured personal

loan (which is processed quickly), introduction of personal banking, and KCB services and

products being affordable. Others commended the bank for introducing ATMs (which have

improved counter services), and serious customer friendly staff. Computerization and

refurbishment of banking halls as well as KCB products and services being suitable for low-

income earners were also cited.

The No respondents’ demographic characteristics included their being four males and sixteen

females, with the majority falling in the 25 to 40 years age bracket. However, one respondent

was below 25 years and another one was between 41 to 50 years. Apart from one respondent

with secondary education, the rest had either college or university education. On

employment, majority were teachers, journalists or civil servants. Others were self-employed

while some were students.

The reasons given for their No response included some branches having reluctant tellers,

others were slow with some being insensitive to customers and particularly when the queues

were long. Others cited punitive service charges, especially if one does not have an ATM

card.53

Table 4 .2 .10 (a) KCB products and services have im proved since its transform ation .

P roducts and services have im proved since its transform ation

S ex o f respondentsM ale F em ale F requency Percent

Strongly agree 30 15 45 37.5Agree 38 15 53 44.2Not sure 8 6 14 11.7Disagree 4 0 4 3.3Strongly disagree 4 0 4 3.3

As table 4.2.10(a) above indicates, a whopping 81.7 percent of the respondents agreed with

the statement that: KCB services and products had improved since its transformation. On the

other hand, 11.7 percent were not sure of the statement while those who disagreed accounted

for 6.6 percent.

4.2.10 (b) Products and services met one’s needs and wants

P rod u cts and services m et o n e ’s need s and w ants

M ales F em ales F requency Percent

Yes 44 34 78 65No 34 8 42 35

Table 4.2.10 (b) above illustrates that 65 percent of the respondents’ needs and wants were

met, while those of 35 percent were not.

In explaining their answers above, the Yes respondents said that it is now easier and quick to

access these products and services, while others said the accounts are chea{5 to maintain

besides being student friendly. Another section of the respondents said that the new look

KCB gave a better picture; worldly looking. Some cited loans being easy to obtain and the

introduction of ATM cards thus making their banking easy and convenient. Others cited the

introduction of a variety of new products like Simba savings and Gold plus accounts and the

acceptance of KCB ATM cards as debit cards in supermarkets.

The No respondents on the other hand cited slow services at times and some up-country

branches not being computerised. Others pointed out that lack of interlinking of KCB

branches outside Nairobi meant they could not withdraw money from those branches.

54

Table 4.2.11 What led to dramatic changes at KCB (Please tick one that impressed you most)

W h a t led to d ram atic changes at K C B Sex o f respondentsM ale F em ale F requency P ercent

Advertising 14 11 25 20.8Lack of political interference 14 7 21 17.5The refurbished banking halls and new KCB colours 10 4 14 11.7Good customer relations 10 3 13 10.8Many new products and services 8 3 11 9.2Good financial management 6 2 8 6.7Staff commitment 6 1 7 5.8Sponsorship o f events and activities 6 1 7 5.8Good social responsibility policy 4 2 6 5.0Any other specify 6 0 6 5.0Good share performance 0 2 2 1.7

As Table 4.2.11 above indicates, advertising with 20.8 percent was rated first while lack of

political interference was second with 17.5. The refurbished banking halls and new KCB

colours took the third position with 11.7 percent each while good customer relations followed

with 10.8 percent. Many new products and services came fifth followed by others with good

share performance taking the last position with 1.7 percent.

Table 4.2.12 Effectiveness of communications channels; as tools used by KCB

C h a n n e l s ___________ High____ M o d e r a t e I ,o wM a le F em a le F req

uencyP e rce n t

M a le F em a le F re quency

P e rce n t

M ale F em a le F requency

P e rc en t

R ad io 5 i 6 5 9 4 13 10.8 3 i 4 3.3T elev ision 8 5 13 10.3 9 2 11 9.2 1 0 1 0.8N ew spapers 7 1 8 6.7 9 1 10 8.3 2 0 2 1.7A dvertisem ent 13 7 20 16.7 2 3 5 4.2 2 0 2 1.7L ette rs 1 0 1 0.8 2 1 3 2.5 11 3 14 11.7R oad shows 2 0 2 1.7 7 0 7 5.3 6 4 10 8.3T elephone 0 0 0 0 1 0 1 0.8 12 16 13.3E-m ail 0 0 0 0 0 1 1 0.8 12 16 13.3N ew s m agazine 1 0 1 0.8 6 3 9 7.5 5 1 6 5.0K C B brochures 6 4 10 8 .3 10 3 13 10.3 1 0 1 0.8Posters by K C B 5 5 10 8 .3 7 4 11 9.2 1 0 1 0.8C alendars 0 0 0 0 4 1 5 4.2 7 3 10 8.3C ustom er care departm ent.

6 2 8 6.7 7 2 9 7.5 1 2 3 1 5

In the high category class, according to the respondents interviewed in Table 4.2.12 above,

advertisement was voted as the most effective channel with 16.7 percent and television was

second having been chosen by 10.3 percent. KCB brochures and posters took the third slot

each with 8.3 percent while newspapers and customer care department also tied in the fourth

position each with 6.7 percent. Others followed in this sequence: radio 5 percent, road shows

55

1.7 percent, while letters and news magazine tied at 0.8 percent. Telephone, e-mail and KCB

calendars did not elicit any response.

In the moderate category class, the highest number of respondents: 10 8 percent chose radio

as the most effective channel, while KCB brochures followed closely with 10.3 percent.

Television and posters by KCB tied in the third position with 9.2 percent. Newspapers were

in the fourth position with 8.3 percent, while news magazine and customer care department

tied at 7.5 percent. The rest followed in the following order: road shows 5.3 percent,

advertisement and calendars tied with 4.2 percent, letters 2.5 percent and finally telephone

and e-mail tied each with 0.8.

In the lower category class, telephone and e-mail were the least effective channels of

communication and they both tied at 13.3 percent, while the second least effective channel

were the letters with 11.7 percent. They were followed by calendars and road shows each

with 8.3 percent and news magazine with 5.0 percent. Others were as follows: radio 3.3

percent, newspapers and advertisement 1.7 percent each. Television, KCB brochures and

posters by KCB tied with 0.8 percent.

Table 4.2.13 KCB’s future according to one’s opinion

F u tu re o f K C B M ale F em a le F req u en cy P ercentVery bright 20 14 34 28.3Bright 56 18 74 61.7Bleak 2 0 2 1.7Not sure 6 4 10 8.3

Accordmg to Table 4.2.13 above, 61.7 percent of the respondents thought that KCB had a

bright future, while 28.3 percent said it was very bright. However, 8 3 percent of the

respondents were not sure and a paltry 1.7 percent said it was bleak.

As a sequel, the respondents were asked to explain their answers above and these were their

responses: they had introduced better packages and services while Automated Teller

Machines (ATMs) service was 24 hours. Others said they had discovered the value of

banking with a local bank like KCB as it had addressed the needs of small depositors besides

being involved in social responsibility activities. Increased computerization and new changes

in management were also cited in this category.

56

The 1.7 percent who said that the future of KCB was bleak argued that the bank does not

value customers’ time, there are few staff members to attend to customers and there is low

staff morale. They also added that KCB should focus more on customers than they are

currently doing.

Table 4.2.14 KCB communications services are the best in Nairobi

C om m unication services are the best

M ale F em ale F requency Percent

Strongly agree 8 4 12 10.0Agree 24 4 28 23.3Not sure 28 16 44 36.7Disagree 20 12 32 26.7Strongly disagree 4 0 4 3.3

Table 4.2.14 above indicates that 36.7 percent of the respondents were not sure that KCB

communications services were the best in Nairobi while 33.3 percent agreed. On the other

hand 30 percent disagreed.

The reasons given by respondents who were not sure above included not being bothered with

other banks, while others said they were too busy to do a comparison as long as their needs

were met by KCB. Others had not stayed with the bank for a long time while others concerns

were to get the loans offered and not to compare it with other banks.

Some of the respondents who agreed that KCB communications services were the best in

Nairobi said that low-income people were being considered than before. Others said thatV/

personal bankers were perfect while others cited good customer relations. Some said the bank

had tried to improve communications with its customers, while others said that the bank had

deliberately sought to close the gap between itself and its customers by holding roadshows

frequently, thus leading to a wider interaction with the society. Another section cited the ease

with which they accessed their money as the bank had established many ATMs outlets

The respondents who disagreed that KCB communications services were the best in Nairobi

observed that the bank was not as vigorous as its competitors during the campaigns, while

others noted that the bank had not computerized all its branches. A section of the respondents

opined that most times computers were off-line and noted that more Tellers should have been

57

employed instead of concentrating a lot on physical changes Others noted that the bank

should have enhanced its communication to the public for it to be understood better, besides

improving customer relations.

Table 4.2.15 The role played by communications in KCB transformation (Please tick one that impressed you most)

Role p layed by com m unication!!

M ale F em ale F req u en cy P ercent

Awareness 36 16 52 43.3Socialization 20 4 24 20.0Advertising 24 16 40 33.4Any other, specify 4 0 4 3.3

As Table 4 2.15 above indicates, 43.3 percent of the respondents said that awareness played

the greatest role in the transformation. This was followed by socialization with 33.4 percent

while education was third with 20 percent. Any other specify, contributed 3.3 percent. Under

this category of others, comments like “KCB had gone out of its way to reach the small

business and savers” were cited.

V

58

CHAPTER 5

DISCUSSION, RECOMMENDATIONS AND CONCLUSION

5.1 Discussion of the Findings

The study confirmed that KCB used Corporate Communications Strategies between January

2003 and December 2004, which contributed to its turnaround. This was supported by 87.5

percent of the staff members interviewed. It was further correlated by 93 3 percent of the

customers interviewed who said they were aware of the many products and services

introduced by KCB at that time.

The respondents’ contention was in accord with the study hypothesis that effective and

multifaceted Corporate Communications Strategies combined with other strategies could turn

around a loss making organization. Similarly, the study also resonated with the second

hypothesis that effective Corporate Communications could help in building confidence,

goodwill, support and trust between an organization and its various publics. This was also in

synchrony with Wilcox (1992) who observed that one of the most important effects of

communication is creation of awareness among the target publics.

The study had two objectives, which were equally vindicated by the findings above and also

as shown here below. The first objective was to investigate whether the Corporate

Communications Strategies employed by KCB from January 2003 to December 2004

contributed in any way in winning its publics’ goodwill, trust and confidence, 'rfiis was

confirmed by 70 percent of the customers interviewed when they said that they were happy

with the new products and services offered. Further 74.2 percent averred that they were

influenced to bank with KCB by Corporate Communications Strategies, which included road

shows and advertisements. Others were new corporate colours and identity and realigned

products and services.

Similarly, this was reinforced by the key informant, when he said, “the bank’s customer base

had increased by 8 percent, while the value of our stock at Nairobi Stock Exchange had also

shot up and the bank reverted to profitability. Besides, this is the strongest balance sheet in

ten years.” He further conceded that publicity strongly played a big role in the turnaround. In

59

this regard he quipped, “we tried as much as possible to strengthen communication to

enhance awareness of our new products and services.”

The second objective sought to identify the most effective communications channels used by

KCB in its corporate communications to its publics during the period under study. The

respondents rated the channels used in the following order of popularity. Television was rated

first with 19.2 percent while radio and KCB brochures followed closely with 17.5 percent

each. Newspapers constituted the third highest percentage of 15 percent followed by

friends and colleagues banking with KCB at 10.8 percent. KCB road shows constituted 9.2

percent and KCB posters 6.6 percent. Others, who accounted for 4.2 percent were ATMs,

visit by KCB employees and rebranding of bank colours.

The above channels used by KCB are in accord with what Jefkins (1992) says about product

publicity. He argues that presented properly, products can be newsworthy and can catch the

eyes of reporters and editors. Companies have found that product publicity is a cost effective

way of reaching potential consumers. Product publicity could be accomplished by placing

information on new products in the newspapers as news and feature stories These cover the

development and launching of new products and even new uses for established products. He

further observes that radio and television talk shows and consumer programmes also contain

large amount of product publicity.

Besides the objectives, the study had also wanted to answer four questions. The first question

sought to know whether KCB had Corporate Communications Strategies. The study affirmed

this position, as majority the staff respondents interviewed answered in the affirmative. This

was further amplified by 58.4 percent of the customer respondents interviewed.

The second question wanted to know the Corporate Communications Strategies used by

KCB. Accordingly, the staff respondents cited ten internal Communications Strategies used

by KCB and rated them in the order of popularity as follows: training, video shows and E-

mail. Others were circulars, workshops, newsletters and meetings. Fax, telephone and memos

came last. This was echoed by the customer respondents who cited external Corporate

Communications Strategies, which included advertising, refurbished banking halls and new

KCB colours. Others were good customer relations, many new attractive products and

60

services including rolling out more Automated Teller Machines (ATMs), and staff

commitment. Recruitment of new management staff and positioning of KCB staff to the

media were also cited. Others included sponsorship of events and activities as well as good

social responsibility policy.

The third question wanted to elicit how KCB was evaluating its Corporate Communications

Strategies as it continued with its transformation and what were the results. According to the

key informant interviewed, KCB was doing this through market research, views expressed by

customers through customer care department and through letters in the suggestion boxes in its

banking halls. Results in this area had been positive as the customer base had increased by 8

percent while the value of KCB shares at Nairobi Stock Exchange had also shot up and the

publicity had partly contributed in the growth of the bank in many areas. For example, in

2004, the bank achieved the strongest balance sheet in ten years!

The fourth question sought to identify the extent to which KCB turnaround was as a result of

its Corporate Communications Strategies. According to the key respondent interviewee,

publicity played a big role in the turnaround in relaying the message of the new KCB

products and services. He further said that KCB tried as much as possible to strengthen

communications to enhance awareness of its new products and services.

This was amplified by 92.5 percent of the staff respondents who said that the training helped

them in coping with the bank’s transformation while 87.5 percent were agreed that training

motivated them to work harder. This was also echoed by 87.5 percent of the same

respondents who affirmed that Communications Strategies used by KCB were effective.

As if to resonate with the above, 81.7 percent of the customer respondents agreed that KCB

products and services had improved since the transformation.

This is in accord with Seitel (1987) who observes that Corporate Communications are crucial

if an organization is to gain a favourable corporate image, especially if its image had been

tainted by a series of loss making scandals, mismanagement and unprofessional business

practices. For such an organization to revert back to a growth trajectory, it must employ a

61

myriad of Corporate Communications transformation strategies. This is what KCB did and

results are evident as demonstrated above.

However, this stand on KCB became discrepant when 65 percent of the customer

respondents said that these products and services had met their needs and wants but an

intriguing 35 percent of the same respondents thought otherwise This was difficult to

decipher, as they did not give reasons despite the request to explain their answers in the

questionnaire.

Another discrepancy was identified when only 33.3 percent of the customer respondents

agreed that KCB communications services were the best in Nairobi. This left a big 36.7

percent averring that they were not sure while 30 percent out rightly disagreed. The reasons

given by respondents who were not sure above included not being bothered with other banks,

while others said they were too busy to do a comparison as long as their needs were met by

KCB. Others had not stayed with the bank for a long time, while others concerns were to get

the loans offered and not to compare it with other banks.

The respondents who disagreed that KCB communications services were the best in Nairobi

observed that the bank was not as vigorous as its competitors during the campaigns, while

others noted that the bank had not computerized all its branches. A section of the respondents

opined that most times computers were off-line and noted that more Tellers should have been

employed instead of concentrating a lot on physical changes. Others noted that the bank

should have enhanced its communications to the public for it to be understood better, besides

improving customer relations.

While Corporate Communications Strategies according to the staff, customers and key

informant respondents played a great role in transforming the bank, other factors enhanced

this event. For instance 17.5 percent of the respondents cited lack of political interference.

This was demonstrated by the sale of the government shares through Nairobi Stock

Exchange, which were oversubscribed Others included reorganization and hiring of

competent management staff from leading corporate organizations. This was further

exemplified by their well-educated and skilled staff, as 80 percent of the respondents were of

62

college and university education while the rest had enviable experience. Other factors were

strong countrywide branch network of the bank, among others.

5.2 Recommendations

5.2.1 For PracticeArising from the study there is need for organizations to recognize and make use of

multifaceted Corporate Communications Strategies whenever they are embarking on

transformation or in times of crisis. These strategies should target both internal and external

publics of the organization. This will ensure an all-inclusive Corporate Communications

process, which will motivate all to support the process, thus guaranteeing positive results.

To avoid organizations recording losses that will warrant major transformation as happened

with KCB, there is need for investors and shareholders to be proactive if such event will be

pre-emptied in future.

5.2.2 For TheoryThe study findings confirm that Corporate Communications Strategies are crucial in

corporate transformation. This was evident by the much-acclaimed KCB turnaround as a

result of employing Corporate Communications Strategies, which had earlier been used by its

models like Barclays and Standard banks. This is in synchrony with learning theory, which

says that learning occurs as a consequence o f one’s behaviour. Here one increases

performance of behaviours that are reinforced and decreases those that are negatively

rewarded or non-reinforced. This is further reinforced by another learning theory, which

points out that learning occurs chiefly through observation of behaviour of others also called

models.

Similarly, what KCB did resonates with systems theory, which states that systems engage in

exchange with their environments, producing changes in both the systems and their

environments. Such changes occur in the processes, structural change and adaptation, which

capture the essence of the corporate communications function in organizations.

5.2.3 For ResearchArising from the study, there is need for an inquiry as to whether government and political

involvement in banking business has negative impact or there are other contributing factors.63

Similarly, there is need for a study to delineate clearly when Corporate Communications

Strategies should be used in the life of a banking institution, as an reengineering tool to avert

poor performance, as happened with KCB.

Finally, the need exists for a study on why banks that use modem information

communication technologies like ATMs do not pre-empt these facilities from going off-line

from time-to-time. This was a complaint noted by a sizeable number of respondents

interviewed in this study, though not a preserve of KCB

5.3 Conclusion

From the study findings it is evident that Corporate Communications Strategies used by

KCB, were effective in transforming the bank into the viable economic entity it has become.

From the study, though not conclusive, government or political involvement in business was

cited as a contributory factor to poor performance. In this regard, it would be prudent for the

state to concentrate on political governance and leave business activities to its citizenry and

other private interested parties.

Also, clear from this study, is the need to use multifaceted Corporate Communications

Strategies combined with other strategies to resuscitate non-performing enterprises. This

worked well for KCB, as majority of the respondents were agreed that they learnt of the new

changes in the products and services from various media. /

As demonstrated by the study findings, multifaceted Corporate Communications Strategies

are invaluable in transforming organizations. This worked well for KCB to the extent that

that it was voted the best bank in Kenya by the authoritative Euromoney magazine of London

in its 2005 Awards for Excellence. Here at home, the bank’s customer base increased by 8

percent, while the value of its stock at Nairobi Stock Exchange also shot up and the bank

reverted to profitability. Accordmg to the management, the bank recorded the strongest

balance sheet in ten years. Besides this, it is now clear that this has had the advantageous

benefits of renewed confidence, support and trust of the bank by its publics.

64

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Baskin Otis et al, (1997) Public Relations, The Profession and the Practice. Third

edition: McGraw-Hill, New York, USA.

Engler Barbara, (1995) Personality Theories. Fourth edition: Houghton Mifflin

Company, Boston.

East African standard, Saturday, March 6 , 2004, and Monday, February 23, 2004.

Jefkins F (1994) Public Relations, Fourth edition: Pitman Publishing, London.

KCB Cascade, Staff Newsletter of the Kenya Commercial Bank, June 2003 and

September 2004 editions.

KCB Annual Report and Financial Statements 2002 and 2003 editions.

KCB Rights Issue, Information Memorandum, June 2004.

KCB Since Inception (1992) Historical Background, Publication of Economics and

Planning Division of KCB Limited.

Miles H. Robert (1997) Corporate Comeback, The story o f Renewal and

Transformation at National Semiconductor. First edition: Jossey-Bass Publishers, San

Francisco.

PR Arena, Journal of the Public Relations Society of Kenya, Issue Number 2-03,

-2003.

Schramm, Wilbur, (1972) Ihe Process and Effects o f Mass Communication Revised

edition. University of Illinois Press, Chicago

Sdorow, (1995) Psychology. Third edition: WM C. Brown Communications, Inc.

Madison. y

Safaricom Magazine, The Option, 1101 and 12th editions, 2004

Scott M. Cutlip, et al, (2004) and (1985) Effective Public Relations. Second Indian

Reprint- Pearson Education Inc. New Delhi and Prentice-Hall, Inc. Englewood Cliffs, New Jersey

Seitel P. Fraser, (1987) The Practice o f Public relations. Third edition: Merril

Publishing Company Columbus, Ohio.The Financial Standard, May 11, 2004.The Daily Nation, March 23, 2004.Tan S. Alexis, (1985) Mass Communication Theories and Research. Second edition:

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Wilcox L. Dennis et al, (1992) Public Relations, Strategies and Tactics. Third edition:Harper Collins Publishers Inc. New York

65

I

APPENDICES

66

QUESTIONNAIRE FOR KCB STAFF

STRATEGIES IN CORPORATE COMMUNICATION: A CASE STUDY OF KENYA

COMMERCIAL BANK LIMITED

This study is being undertaken in partial fulfillment of the award of Master of Arts degree in

Communication Studies at the School of Journalism, University of Nairobi

INSTRUCTIONS

♦ Please spare a few minutes to complete the questionnaire below.

♦ Kindly tick or answer the questions correctly.

♦ Do not write your name. Any information you give will be held in confidence. Thank

you for agreeing to be part of this study.

Your sex is:a) Maleb) Female

1. Which of the following describes your age?a) Under 25 yearsb) 25-40 yearsc) 41-50 yearsd) Over 50 years

2. Which of the following describes your level of education?a) Primaryb) Secondaryc) Colleged) University

4. What is your currentjob title?----------------------------------------------------------

5. How long have you worked for KCB?a) 0-5 yearsb) 6-10 yearsc) 11-15 yearsd) 20 years and above

6 (a) Before KCB transformation, did the management conduct staff training?

N n

6(b) If the training was held, did it help you in coping with the bank’s transformation?67

a) Strongly agreeb) Agreec) Not sured) Disagreee) Strongly disagree

Explain your answer above-

6(c) If the training was held, did it motivate you to work harder?a) Strongly agree

b) Agreec) Not sured) Disagreee) Strongly disagree

7(a) Do you strongly agree or agree or not sine or disagree or strongly disagree with the statement that the communication strategies used by KCB management to sell the idea of the bank transformation to the staff members were effective.

a) Strongly agreeb) Agreec) Not sured) Disagreee) Strongly disagree

7(b) Please name the communication strategy(s) used.a ) -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b) --------------------------------------------------------------------------------------------------------c>----------------------------------------------------------------------------------------------------------d) --------------------------------------------------------------------------------------------------------e) --------------------------------------------------------------------------------------------------------------------------------------------------------------

8.D0 you strongly agree or agree or not sure or disagree or strongly disagree with the statement that in its communication to the staff members about transformation, KCB exhibited sensitivity.

a) Strongly agreeb) Agree '•/c) Not sured) Disagreee) Strongly disagree

Explain your answer above-----------------------------------------------------------------------------------

9. Do you strongly agree or agree or not sure or disagree or strongly disagree with the statement that, a transformed KCB has improved the overall-working environment.

a) Strongly agreeb) Agreec) Not sured) Disagreee) Strongly disagree

Explain your answer above----------------------------------------------------------------------------------

Thanks for your cooperation.

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QUESTIONNAIRE FOR KCB CUSTOMERS

STRATEGIES IN CORPORATE COMMUNICATION: A CASE STUDY OF KENYA

COMMERCIAL BANK

This study is being undertaken in partial fulfillment of the award of Master of Arts degree in

Communication Studies at the School of Journalism, University of Nairobi.

INSTRUCTIONS:

♦ Please spare a few minutes to complete the questionnaire below.

♦ Kindly tick or answer the questions correctly.

♦ Do not write your name. Any information you give will be held in confidence. Thank

you for agreeing to be part of this study. 1 2 3 4 5

1. Your sex is:a. ) Maleb) Female

2. Which of the following describes your age?a) Under 25 yearsb. ) 26-40 yearsc. ) 41-50 yearsd. ) Over 51 years

3. Which of the following describes your level of education? /a. ) Primaryb. ) Secondaryc) Colleged) University

4. What do you do for a living?a. ) Employed - Occupation-------------------------------------------------b. ) Self-employed - Occupation-------------------------------------------------4 ny other, specify----------------------------------------------------------------------

5. fo r how long have you been a KCB customer?a. ) 1-2 yearsb. ) 3-6 yearsc. ) 7-10 yearsd. ) 11 years and above

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6. Do you strongly agree or agree or not sure or disagree or strongly disagree with the statement that, for a long time KCB’s main shareholder has been the government, and as a result, it was not ran strictly as a business concern.

a. ) Strongly agreeb. ) Agreec. ) Not sured. ) Disagreee. ) Strongly disagree

7 (a) KCB has introduced many products and services lately0

Yes

7 (b) If yes, how did you learn about these products and services?a) Radiob) TVc) Newspaperd) KCB brochurese) KCB road shows 0 KCB postersg) Friends and colleagues banking with KCBh) Any other, specify-----------------------------------------------

8. If you started banking with KCB in the last two and half years or so, what or who influenced you most in deciding to open the KCB account?

a) Road shows by KCBb. ) Advertisements by KCB UNIVERSITY OF NAIROBIc. ) New corporate colors and identity of KCB EAST AFRICANA COLLECTION1d. ) Products and services of KCBe. ) ) Friends and colleagues banking with KCBf. ) ) Any other specify--..... -............. -...........-................ .........--------------------------

9 (a) Are you happy with the services that KCB is offering you lately?

Yes9 (b) If yes, please explain-

10(a) Do you strongly agree or agree or not sure or disagree or strongly disagree with the statement that KCB services and products have improved since its transformation.

a.) Strongly agree

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b. ) Agreec. ) Not sured. ) Disagreee) Strongly disagree

10 (b) Have these new KCB products and services met your needs and wants?

Yes

10 (c) If yes, how do the above products and services meet your needs and wants? Please explain----------------------------------------------------------------------------------------------------------- * i)

11 What would you say led to the dramatic changes at KCB? (Please tick one that impressed you most).

a) Good financial management

b) Good share performance

c) Advertising

d) Good customer relations

e) Staff commitment

f) Lack of political interference

g) Good social responsibility policy

h) Many new products and services

i) The refurbished banking halls and new KCB colours

j) Sponsorship of events and activities

k) Any other specify-------------------------------------------------------------------------------------

12. In the table below, tick the communication channels in the order of effectiveness, as communication tools as used by KCB in the last two years or so.

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Channel High Moderate Low1. Radio2. Television3. News papers4. Advertisement5. Letters6. Road shows7. Telephone8. Email9. News magazines10. KCB brochures11. Posters by KCB12. Calendars13. Customer care dept.

13. In your opinion, what do you think is the future of KCB?a) Very brightb) Brightc) Bleakd) Not sure

Please explain your answer above----------------------------------

14. In your opinion, do you strongly agree or agree or not sure or disagree or strongly disagree with the statement that, in the banking industry, KCB’s communications services are the best in Nairobi?

a) Strongly agreeb) Agreec) Not sured) Disagreee) Strongly disagree 'V

Please explain your answer above--------------------------------------------------------------------------

15. What role did communication play in KCB transformation?a) Awarenessb) Socializationc) Advertisinge) Any other, specify------------------------------------------

Thanks for your cooperation

72

KEY INFORMANT INTERVIEW

1. At the beginning of 2003, KCB embarked on far reaching changes. What necessitated

these changes?

2. KCB rebranded its corporate image in 2003. Why was it necessary to rebrand your bank?

3. What are the benefits that have accrued from this rebranding?

4. In the last two years, KCB introduced a variety of products and services, for example the

unsecured personal loan and different types of credit cards, among others. Why did you do

this?--------------------------------------------------------------------------------------------------------------

5. In January 2003 KCB announced a shocking loss of KShs 3 billion Didn’t this impact

negatively on the bank’s corporate image?---------------------------------------------------------------

6. KCB has been involved in an intense publicity campaign to promote its products and services, more than any other time before. What was the rationale for this?

7. What has been the impact of the publicity campaign?

8. When KCB issued a Rights Issue in June, it was hailed as a successful venture. What do you attribute this success to?

9. Since the rebranding of the bank, what feedback have you been getting from your clients and staff?

10. Your organization has also been involved in sponsorship of many events in the last two years or so, what has been the rationale for this?

11. To what extent can the successful turnaround of KCB be as a result of its renewed Corporate Communications Strategies?

12. How has KCB been evaluating its communications strategies?

13. What have been the results of this evaluation?

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